Income Tax Act 2007 section 426

Gift aid: election to carry back relief

Section 426 allows an individual who makes a qualifying Gift Aid donation to elect to have that donation treated as if it were made in the previous tax year, and paragraph 100 of Schedule 2 provides special transitional rules for donations made in the 2007-08 tax year (the first year under the new Act).

• A qualifying Gift Aid donation made in 2007-08 could be carried back to the previous tax year (2006-07) by election
• The carried-back donation had to satisfy the condition that, if made in the earlier year, the grossed-up amount would have been payable out of profits or gains charged to income tax or capital gains tax
• If the election was made, the older Gift Aid rules under section 25 of the Finance Act 1990 applied to the donation as though it were a qualifying donation made in the earlier year
• Certain provisions of section 426 (subsections (4) and (5)) were disapplied for 2007-08 donations, reflecting the fact that the earlier year fell under the old legislative regime