Income Tax Act 2007 section 434

The relievable amount

Section 434 explains how to calculate the amount of income tax relief available when an individual gifts or sells qualifying investments (such as shares, securities or real property) to a charity at less than market value.

• For outright gifts, the relievable amount is the net benefit to the charity plus the donor's incidental disposal costs, minus any benefits received back by the donor or a connected person
• For sales at undervalue, the relievable amount is the excess of the net benefit over the sale price, plus a limited portion of incidental costs, minus any benefits received back
• If either formula produces a negative figure, the relievable amount is nil — you cannot create a negative relief
• The inclusion of incidental disposal costs in an undervalue sale is capped by reference to the deemed no-gain-no-loss consideration under capital gains tax rules