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  1. avatar says

    In example 17, I assume taxable income of £96,000 makes him an additional rate taxpayer. We have given 20% relief at source and how come we haven’t applied the 25% relief in extending the bands by 25%? We have increased the bands by the gross amount which was 20%

    Confused!!!

    • avatar says

      Hi Abeolu,

      In example 17, Kerry is a higher rate (not additional) tax payer, because her net income is £106,000 (see the answer on page 171 of the course notes).

      As you’ll see in the answer, the basic rate band was increased by the gross gift aid contribution (£4800 x 100/80) of 6000. So, it was £31,865 + £6000 = £37,865.

      You mentioned “We have given 20% relief at source and how come we haven’t applied the 25% relief in extending the bands by 25%?”.

      Where did you get the 25% from? The relief is always two things:

      1. At source 20%
      2. Increase basic rate band by gross gift aid contribution for higher rate taxpayers
      3. Increase higher rate band by gross gift aid contribution for additional rate taxpayers

      Please somebody correct me if I’m wrong, but I hope that makes sense.

  2. avatar says

    In Example 16 when calculating ANI we deduct gift aid payments from Net Income, to realise that ANI > £120,000 and thus PA = Nil.

    So in example 15 we didn’t deduct gross gift aid payment from net income, why is this? I assume because net income was below the £100,000 limit?

    HELPPP!

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