Income Tax Act 2007

The relief U.K.

413 Overview of Chapter U.K.

(1) This Chapter gives relief for some gifts of money to charities by individuals.

(2) The relief is set out in section 414.

(3) The Chapter contains provisions under which, in some circumstances—

(a) the individual's entitlement to some other reliefs may be restricted (see section 423), and

(b) the individual may be charged to income tax (see section 424).

(4) See section 430 for bodies that are treated as charities for the purposes of this Chapter.

[F1 (4A) This Chapter is subject to section 809ZM (removal of income tax relief in respect of tainted charity donations etc).]

(5) For related reliefs for charities see Part 10 of [F2 this Act and Part 11 of CTA 2010.]

[F3 (6) For related reliefs for community amateur sports clubs see Chapter 9 of Part 13 of CTA 2010.]

Textual Amendments

F1 S. 413(4A) inserted (19.7.2011) (with effect in accordance with Sch. 3 para. 27 of the amending Act) by Finance Act 2011 (c. 11), Sch. 3 para. 10

F2 Words in s. 413(5) substituted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 524 (with Sch. 2)

F3 S. 413(6) inserted (17.7.2012) (with effect in accordance with Sch. 15 para. 17(2) of the amending Act) by Finance Act 2012 (c. 14), Sch. 15 para. 8

414 Relief for gifts to charity U.K.

(1) An individual who makes a gift to a charity which is a qualifying donation is entitled to the relief set out in subsection (2).

(2) The Income Tax Acts have effect in their application to the individual for the tax year in which the gift is made as if—

(a) the gift had been made after deduction of income tax at the basic rate, and

(b) the basic rate limit [F4 and the higher rate limit] (see [F5 section 10]) were increased by an amount equal to the grossed up amount of the gift.

(3) See subsection (7) of section 535 of ITTOIA 2005 (gains from contracts for life insurance etc: top slicing relief) for provision about how relief under this Chapter is to be ignored for the purpose of calculating relief under that section.

Textual Amendments

F4 Words in s. 414(2)(b) inserted (with effect in accordance with Sch. 2 para. 25 of the amending Act) by Finance Act 2009 (c. 10), Sch. 2 para. 6

F5 Words in s. 414(2)(b) substituted (21.7.2008 with effect in accordance with Sch. 1 para. 65 of the amending Act) by Finance Act 2008 (c. 9), Sch. 1 para. 20

415 Meaning of “grossed up amount” U.K.

In this Chapter references to the grossed up amount of a gift are to the amount of the gift grossed up by reference to the basic rate for the tax year in which the gift is made.

416 Meaning of “qualifying donation” U.K.

(1) A gift made to a charity by an individual is a qualifying donation for the purposes of this Chapter if—

(a) conditions A to [F6 F] are met, and

(b) the individual [F7 , or an intermediary representing the individual,] gives the charity [F8 , or an intermediary representing the charity,] a gift aid declaration relating to the gift (see section 428).

[F9 (1A) For the purpose of subsection (1)(b) an intermediary is—

(a) a person authorised by the individual to give a gift aid declaration on behalf of that individual to the charity,

(b) a person authorised by a charity to receive a gift aid declaration on behalf of that charity, or

(c) a person authorised to perform both of the roles described in paragraphs (a) and (b).]

(2) Condition A is that the gift takes the form of a payment of a sum of money.

(3) Condition B is that the payment is not subject to any condition as to repayment.

(4) Condition C is that the payment is not a sum falling within section 713(3) of ITEPA 2003 (payroll deduction scheme).

(5) Condition D is that the payment is not deductible in calculating the individual's income from any source.

(6) Condition E is that the payment is not conditional on, associated with or part of an arrangement involving, the acquisition of property by the charity from the individual or a person connected with the individual.

An acquisition by way of gift is ignored for the purposes of this condition.

[F10 (6A) Condition EA is that the payment is not by way of, and does not amount in substance to, waiver by the individual of entitlement to sums (whether of principal or return) due to the individual from the charity in respect of an amount—

(a) advanced to the charity, and

(b) in respect of which a person, whether or not the individual, has obtained relief under Part 5B (relief for social investments).]

(7) Condition F is that—

(a) there are no benefits associated with the gift, or

(b) there are benefits associated with the gift but the restrictions on those benefits are not breached.

See sections 417 to 421 for provision about benefits associated with gifts.

F11 (8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Textual Amendments

F6 Letter in s. 416(1)(a) substituted (8.4.2010 with effect in accordance with Sch. 8 para. 8(5) of the amending Act) by Finance Act 2010 (c. 13), Sch. 8 para. 3(2)(a)

F7 Words in s. 416(1)(b) inserted (with effect in accordance with s. 20(4) of the amending Act) by Finance Act 2015 (c. 11), s. 20(2)(a)(i)

F8 Words in s. 416(1)(b) inserted (with effect in accordance with s. 20(4) of the amending Act) by Finance Act 2015 (c. 11), s. 20(2)(a)(ii)

F9 S. 416(1A) inserted (with effect in accordance with s. 20(4) of the amending Act) by Finance Act 2015 (c. 11), s. 20(2)(b)

F10 S. 416(6A) inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 11 para. 11

F11 S. 416(8) omitted (8.4.2010 with effect in accordance with Sch. 8 para. 8(5) of the amending Act) by virtue of Finance Act 2010 (c. 13), Sch. 8 para. 3(2)(b)

417 Meaning of “benefits associated with a gift” U.K.

A benefit is associated with a gift for the purposes of this Chapter if it is received by the individual who makes the gift, or a person connected with the individual, in consequence of making the gift.