Income Tax Act 2007 section 414A

Tax reduction or charge if basic rate, and devolved basic rate, differ

Section 414A provides for an adjustment to income tax when a Scottish or Welsh taxpayer makes a Gift Aid donation and their devolved basic rate of tax differs from the UK basic rate.

• Applies to Scottish and Welsh taxpayers who make Gift Aid donations where the devolved basic rate differs from the UK basic rate
• If the devolved basic rate is higher than the UK basic rate, the individual receives a tax reduction reflecting the difference
• If the devolved basic rate is lower than the UK basic rate, an additional income tax charge arises to reflect the difference
• Any additional tax charge is capped at the amount of the individual's tax saving from the Gift Aid extension of the basic rate band