Chapter 9 & 26: Tax Relief on Donations to Charity & Pension Schemes Flashcards
Tax Relief on Donations to Charity
How is The Tax Relief Obtained?
On Donations Made to UK & EEA Registered Charities.
Tax Relief on Donations to Charity
How Did The Relief Change From 6 April 2024 Onwards?
The Tax Relief is No Longer Received on Donations to EEA Registered Charities.
(UK Registered Charities Only)
Tax Relief on Donations to Charity
What Election Can be Made for Gift Aid Donations?
The Gift Aid Donation is Treated as Made in The Previous Tax Year.
The Donation (& Election) Must be Made by 31 January in The Tax Year.
Tax Relief on Donations to Charity
How Are Gifts of Quoted Shares & Land Treated For Tax Purposes?
As a Deductible Payment in The Tax Computation.
(incl. Any Costs of Transfer)
Tax Relief on Donations to Charity
To be Given Tax Treatment, Gifts of Shares Must be:
- Quoted on a Recognised Stock Exchange; and
- Made to a UK or EEA Registered Charity.
Tax Relief on Donations to Charity
How is The ‘Relevant Value’ Defined?
As The Market Value at The Date of Gift.
Pension Schemes
What is The Main Advantage of a Registered Pension Fund?
Any Growth is Completely Tax-Free.
Pension Schemes
What is The Max. Gross Pension Contributions That Can Attract Relief?
The Higher of:
* 100% of Their Relevant Earnings; or
* £3,600
Pension Schemes
When Drawing From a Pension, How Does Buying an ‘Annuity’ Work?
- Up to 25% of The Pot Can be Taken as a One-Off Tax-Free Lump Sum.
- The Remainder of The Fund Converted Into an ‘Annuity’ - Guarenteed Income For Life.
(The Tax-Free Lump Sum is Capped at £268,275)
Income From The Annuity is Taxable Non-Savings Income.
Pension Schemes
What is a ‘Defined Benefit’ Pension Scheme?
The Benefits Available Are Based on:
* The Employee’s Salary; and
* Length of Service
Pension Schemes
What is Relief at Source Given on?
Personal Pension Contributions.
Pension Schemes
What Sources of Income Are Classed as ‘Relevant Earnings’ For Pension Purposes?
- Employment;
- Trading; and
- Properties Classed as FHLs.
Pension Schemes
What was the Annual Allowance From 2014/15 to 2023/24?
£40,000.
Pension Schemes
How Can The Annual Allowance be Increased?
From Any Unused Allowance in The Previous 3 Tax Years.
Current Year’s in Priority.
Pension Schemes
What Happens When Pension Input Exceeds The Available Annual Allowance?
The Excess Charged to Income Tax.
(At The Marginal Rate of Tax)
Treated as The ‘Top Slice’.
