Tax relief on donations for higher rate taxpayers
Donors who pay tax above the basic rate can reclaim the difference between the rate they pay and the basic rate of tax via their personal tax returns.
Example for a gift of £100,000 where the donor pays tax at 45%
- Your client donates £100,000 to charity.
- The charity can claim Gift Aid on the donation at 25% so the charity ultimately receives £125,000.
- Your client can reclaim £31,250 via their personal tax return (i.e. the difference in tax rates (45% - 20%) x gross donation of £125,000).*
* In order to qualify your client has to be a UK taxpayer and subject to an income or Capital Gains Tax liability equating to the same amount.