Scenario 3

A 40% taxpayer usually makes an annual gift to a charity of £1,000 on or around 1 May each year on which Gift Aid is claimed. In early 2014, she realises that due to her forthcoming retirement, she is likely to be only a basic rate taxpayer in 2014–15. Thus, any Gift Aid donations that year are likely to give rise to no personal tax advantage (although an advantage to the charity will arise). She decides, therefore, to accelerate her 2014 gift so that it is paid before 6 April 2014 so as to claim the additional tax relief available as a higher rate taxpayer.

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