What is a qualifying donation under section 416 of the Income Tax Act 2007?

A qualifying donation is a monetary payment from an individual to a charity that satisfies six conditions (A through F) and is accompanied by a valid Gift Aid declaration. The gift must be unconditional, not linked to a property sale, not duplicated under payroll giving, and any donor benefits must fall within permitted limits.

What are the six conditions a Gift Aid donation must meet under section 416?

The six conditions require the gift to be a cash payment (A), unconditional with no repayment obligation (B), not already relieved through payroll giving (C), not deductible against the donor's income (D), not linked to a sale of property to the charity (E), and that any benefits received by the donor are nil or within statutory limits (F).

Can a Gift Aid declaration be submitted through an intermediary?

Yes, a Gift Aid declaration does not have to be given directly by the donor to the charity. It can be handled through an intermediary who is authorised by the individual to submit the declaration, authorised by the charity to receive it, or a single person authorised to perform both roles on behalf of donor and charity.

What is Condition EA and how does it affect Gift Aid qualifying donations?

Condition EA, introduced by Finance Act 2014, prevents a waiver of loan repayment or return from being treated as a qualifying donation where social investment relief under Part 5B has been claimed on the amount advanced. This applies whether the social investment relief was obtained by the donor or by another person.

Income Tax Act 2007 section 416

Meaning of "qualifying donation"

Section 416 defines what counts as a "qualifying donation" for Gift Aid purposes, setting out the conditions a gift from an individual to a charity must satisfy and the requirement for a Gift Aid declaration.

A qualifying donation must be a monetary payment, not subject to repayment conditions, and must be accompanied by a valid Gift Aid declaration given by the donor, the charity, or an authorised intermediary acting for either party.
The donation must not already qualify for relief through the payroll giving scheme or be deductible in calculating the donor's income from any source, preventing any double claim for tax relief.
The donation must not be linked to a sale of property by the donor (or a connected person) to the charity, and must not amount to a waiver of amounts owed to the donor where social investment relief has been claimed on the underlying advance.
Any benefits the donor receives in connection with the gift must either be nil or fall within the permitted limits set out in sections 417 to 421.

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