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Where Taxpayers and Advisers Meet

Income tax & Gift Aid.

2912pwil
Posts:8
Joined:Fri Nov 28, 2014 11:59 am
Income tax & Gift Aid.

Postby 2912pwil » Fri Apr 02, 2021 1:52 pm

Greetings all & thanks for all & every comment!

My brother died, 83, intestate, Dec 2020 (not covid). I and sole remaining other sibling expect (going through solicitors) to inherit & be executors.

We know he wanted to leave money to various Charities & will respect those wishes. But there's the question of what best benefits charity from a (for example) £10k donation to Battersea Dogs.

We've been led to understand gift aid is not possible from an estate. So rather than direct £10k from estate, could direct the £10k to me or other sibling, then donate with gift aid: (Legal & OK??) - so another £2.5k to the dogs.

But also understand from
https://www.gov.uk/donating-to-charity/gift-aid
- that ### Paying enough tax to qualify for Gift Aid

Your donations will qualify as long as they’re not more than 4 times what you have paid in tax in that tax year (6 April to 5 April).

The tax could have been paid on income or capital gains.

You must tell the charities you support if you stop paying enough tax.
####

I pay about £10k tax, so OK for my own charity donations and those "from late brother via me" up to £40k donations??

Wish to ensure we're doing this all above board & legit.

Best wishes to all & thanks in advance.

pawncob
Posts:4782
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Income tax & Gift Aid.

Postby pawncob » Fri Apr 02, 2021 3:47 pm

Is the estate taxable? Charity relief exempts the donation from the estate, saving 40% IHT.
With a pinch of salt take what I say, but don't exceed your RDA

2912pwil
Posts:8
Joined:Fri Nov 28, 2014 11:59 am

Re: Income tax & Gift Aid.

Postby 2912pwil » Fri Apr 02, 2021 5:25 pm

Below limit, probably £180k-ish. (Low, partly due to very imprudent "Equity release" scheme/scam with surprising interest rates)

pawncob
Posts:4782
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Income tax & Gift Aid.

Postby pawncob » Sat Apr 03, 2021 10:24 am

There's nothing to stop you making donations from the monies you receive from the estate, and claiming gift aid.
With a pinch of salt take what I say, but don't exceed your RDA

2912pwil
Posts:8
Joined:Fri Nov 28, 2014 11:59 am

Re: Income tax & Gift Aid.

Postby 2912pwil » Sat Apr 03, 2021 11:57 am

And as we've been led to understand gift aid is not possible from an estate???

2912pwil
Posts:8
Joined:Fri Nov 28, 2014 11:59 am

Re: Income tax & Gift Aid.

Postby 2912pwil » Thu Oct 14, 2021 2:28 pm

Probate granted, joint with my sister. A supplementary question. House currently under offer, hope sorted by Xmas.

Would HMRC consider it fair to add these donations to other charitable giving that I report on MY tax return & gain extra relief from MY income tax bill?? (If legit I think I’d then in fairness bung half the savings to sister…)

Best regards!

pawncob
Posts:4782
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: Income tax & Gift Aid.

Postby pawncob » Thu Oct 14, 2021 4:39 pm

As to the question: can Gift Aid be claimed on a donation to charity in a person's will? I'm assuming the point of the enquiry is whether the difference between the 40% IHT rate and basic rate tax can be reclaimed in the same way as outlined above.

The answer is no - the person's estate has already escaped the 40% tax that would have been charged on the amount of the gift.

So for example, a gift of £5,000 would reduce your IHT bill by £2,000. Any further concession would be like having two bites of the cherry, and while chancellors are generous in their treatment of charitable gifts, they are not that generous.
From: https://www.thisismoney.co.uk/money/experts/article-1674672/Can-executors-claim-Gift-Aid.html
With a pinch of salt take what I say, but don't exceed your RDA

2912pwil
Posts:8
Joined:Fri Nov 28, 2014 11:59 am

Re: Income tax & Gift Aid.

Postby 2912pwil » Sun Oct 17, 2021 9:13 am

Thanks, not quite: The question is, after inheritance comes down to me & my sister (he died intestate, no will), knowing what we do of his previous wishes we plan to donate £10ks to various charities in his memory. In our names, me & my sister, substantial amounts.

For some years I've been declaring charity donations to HMRC in my annual self assessment, to reduce MY income tax bill. Is it/would it be legit to make donations, claim gift aid & then me to claim income tax relief later on self assessment, please?


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