Income Tax Act 2007 section 427

Meaning of "charged amount"

Section 427 defines how to calculate an individual's "charged amount", which is used to test whether the rules on gifts to charities by individuals are met.

• The charged amount is the sum of two components: modified net income and the amount chargeable to capital gains tax, both for the same tax year.
• Modified net income for the year is calculated in accordance with the definition in section 1025 of the Act.
• The amount on which the individual is chargeable to capital gains tax for the same year must also be determined.
• The resulting total is then compared against the relevant gifts threshold in either section 422 or section 426 to establish whether the applicable limits have been exceeded.