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Sir your lectures are amazing… Thanks a lot…..
I have got a small doubt regarding the nil rate band….
Let’s imagine the saving income was 35000 £
What if the non savings income is only £4500 after providing the personal allowances…..
Will the tax payer be eligible for the nil rate band..
Will the tax liability be the following way :
NS – 4500 * 20 %
Saving
500* 0% ( 5000- 500)
500 * 0% ( 500 £ only allowed as the tax payer fall in the higher rate threshold)28000 * 20%
6000 * 40%Got it sir….. Things are being very well explained in your lectures…. Totally loving ur lectures…..
I didn’t understand the treatment of GIFT AID system for a Basic rate taxpayer….
Could you please demonstrate to me with an example please….
Your workings are correct for the taxability of the savings income.
For a basic rate taxpayer there is NO effect on the income tax computation as quite simply the taxpayer has received his basic rate tax relief “at source”
This means that if the taxpayer has made a gift aid payment of £80, the charity will receive both the donation from the taxpayer of £80 and be able to claim back from HMRC the basic rate tax that the taxpayer would have suffered on that part of his income from which he or she has now made that donation (20/80 x 80 = 20) – so the charity receives £100 in total.
(On £100 of income the taxpayer paid 20% income tax leaving him or her with £80 which has then be given to charity)
You will not have to explain this but simply deal with the gift aid payment correctly on the income tax computation and for this you are most likely to be dealing with a higher rate taxpayer!
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