Income Tax Act 2007 section 414

Relief for gifts to charity

Section 414 sets out the income tax relief available to individuals who make qualifying donations to charity, explaining how the donation is treated and how it affects the tax rate thresholds.

• An individual who makes a qualifying donation to charity is entitled to have the gift treated as if it were made after deduction of income tax at the basic rate
• The donor's basic rate limit and higher rate limit are increased by the grossed-up amount of the gift, meaning more of their income is taxed at lower rates rather than at higher or additional rates
• Scottish taxpayers also benefit from corresponding increases to their Scottish basic rate upper limit and the limits for any Scottish rates above the Scottish basic rate
• This Gift Aid relief is disregarded when calculating top slicing relief on gains from life insurance policies under section 535 of ITTOIA 2005