Chapter 9 - Tax Relief on Charity Donations

Question 1

At what rate of tax are gift aid payments made?

Answer 1

Basic rate - 20%

Question 2

True or false

adjustments have to be made to the basic, higher, and additional rates of tax for all tax payers

Answer 2

False

If the taxpayer is a basic rate taxpayer, no further adjustments are needed

For higher & additional rate taxpayers, the basic & higher rate limits are adjusted

Question 3

How do you work out the basic rate limit adjustment?

Answer 3

donation amount x (100/80)

Question 4

How do you work out the personal allowance for gift aid payments for individuals over the PA threshold?

Answer 4

net income LESS gross donation to charity (donation amount x (100/80)) - the resulting figure is the adjusted net income from which we can determine the PA

Question 5

True or false

If a taxpayer gives shares quoted on a recognised stock exchange to a UK charity, the market value of the shares is treated as non-savings income

Answer 5

False

The market value of these shares is treated as a deductible payment

Question 6

True or false

We deduct the market value of shares from the total income to arrive at net income

Answer 6

True