Income Tax Act 2007 section 419

Gifts and benefits linked to periods of less than 12 months

Section 419 adjusts how the Gift Aid benefit limits in section 418 are applied when gifts or associated benefits are linked to periods shorter than 12 months, by annualising the relevant amounts to prevent exploitation of the cash limits.

• Where benefits or gifts are linked to periods of less than 12 months, the actual values must be annualised before being compared against the Gift Aid benefit limits in section 418
• Four conditions (A to D) determine when annualisation is required, covering situations such as benefits relating to short periods, rights to periodic benefits over short periods, and series of gifts made at intervals of less than 12 months
• Under conditions A, B or C, both the benefit value and the gift amount are annualised; under condition D, only the gift amount is annualised
• The annualisation formula multiplies the actual value or amount by 365 and divides by the number of days in the relevant short period or the average number of days between intervals