PTC - Gift Aid/Pension Extending the band

Chrissiemartin1 Registered Posts: 18 New contributor 🐸
Can anyone explain the gift aid bit

I know that you have to work out the gross figure so x100/78 and then by that figure you extend the 22% band

but do you take this figure off your total income figure

say you earned 38,819 and you have say 3,000 for gift aid or pension

after you have have allocated all the 22% tax what would you have left to work out does you 3,000 come off the 38,819..........

does that make sense?


  • brett316
    brett316 Registered Posts: 48 Regular contributor ⭐
    I think it just says in addition to the income so no you shouldn't have to take it off the income as well but I see what you mean. Just extend the band as you said.
  • Chrissiemartin1
    Chrissiemartin1 Registered Posts: 18 New contributor 🐸
    In the dec o5 paper it has taken it off look at the task 1.3 answer you had 39,815 as non savings income

    so you have 2020 @ 10
    then 29380 @ 22
    3600 @ 22

    this all totals 31,400 excluding the 3600 so from non saving you still have left
    8415 to allocate in N/Savings. in the answer is shows 4815 @40%
    and then it goes on to allocate the Savings an then divideds

    Can someone help please:crying:
  • Moseley_21
    Moseley_21 Registered Posts: 59 Regular contributor ⭐
    Im almost positive that you just take off the gift aid from the salary much like an Occupational pension for example

    Salary - £36,000
    Gift Aid - (£3,000)
    Total in non savings under salary - £33,000

    This then gives relief on £3,000 that was used for gift aid?

    Does anyone agree with me??
  • po1988
    po1988 Registered Posts: 39 Regular contributor ⭐
    hello no you do not take GIFT AID of the employment income, it EXTENDS the basic rate band as previously said and only effects the higher rate tax payers.

    The answer of 4815 @ 40% relates to old tax rules.
    You need to understand that the questions all relate to difference tax years and the only past exam paper that relates to our year is june 2008.

    My tutor gave me updtated versions of the papers with answers relating to our tax year 07/08 and i presume your tutor did too.

    If not then the answers on this site will be incorrect as they relate to older tax years.

    Hope this helps.

    Ps the answer for dec 05 is...

    Basic rate increses by 3600 to 38200. so
    41555(correct figures as our PA for year is 5225)-34600= 3355 higher rate
    Dividends first so 900@32.5% = 292.5
    Savings Next so 1320@40% = 528
    Non savings(3355-900-1320) = 1135@40% = 454
    Non savings start rate 2230@ 10% = 223
    Rest non savings 32370+3600= 35970@22% = 7913.4

    Total Tax liability will be 9410.9
  • Big Bird
    Big Bird Registered Posts: 62 Regular contributor ⭐
    thats correct if you give a Gift Aid it extends the tax band but if you donate via a Payroll giving scheme through work then this is taken off your salary like a works pension scheme
  • renae
    renae Registered Posts: 76 Regular contributor ⭐
    Doea anyone have the amended figures for Dec 07 PTC?
    I am stuck on task 1.4 - I have increased my tax band re the gift aid, but then I don't understand the next calculation, with the +128???

    Help, still have pensions & shares to conker b4 9am....its gona be a long one!
  • swampy19
    swampy19 Registered Posts: 10 New contributor 🐸
    Just worked it out!! The £128 is the gift aid grossed up (100 x 22/78) which is then added on - to extend the tax band by the total amount of gift aid that could be claimed back by the charity. Because she is a higher rate payer she si entitled to do this.

    Does that make sense?

  • renae
    renae Registered Posts: 76 Regular contributor ⭐
    need to read it a couple of times but I am sure it will...thanks. Can I borrow you for one more then....same paper but task 2.4 re Zhu's house, in the amended answer they have non occupational months of 33 - where does this come from?

    I don't really know the rules on prime residence etc, but looking at the paper he has been classed as 'occupation months' for the whole period (215) and then 33 months od non occupation, added to make 248? Just can't work out where the 33 has come from...either that or I am just losing interest!!
  • swampy19
    swampy19 Registered Posts: 10 New contributor 🐸
    Periods of deemed occupation:
    The last 3 years of ownership (even if not living in it)
    Upto three years for any reason
    Any period spent working abroad
    Upto 4 years absence while working elsewhere.

    So March 1987 - Sept 1990 Exempt Lived in 42 months
    Sept 1990 - Sept 1996 Exempt Abroad 72 months
    Sept 1996 - Feb 2002 Exempt Lived in 65 months
    Feb 2002 - Oct 2004 Non exempt Moved out 33 months
    Oct 2004 - Oct 2007 Exempt for last 3 years 36 months

    Does that help?

  • renae
    renae Registered Posts: 76 Regular contributor ⭐
    :001_smile:Amazing........stuff paying college fees, just need you email address!! Thanks, don't go to sleep.......may have more...
  • renae
    renae Registered Posts: 76 Regular contributor ⭐
    Last one of the evening: Dec 06 task 2.2... is the Dec 2000 share ignored because we work on the LIFO Basis??? :huh:
  • swampy19
    swampy19 Registered Posts: 10 New contributor 🐸
    Sorry not got that paper and cant read it online without downloading new gumpf on pc.

    But points to consider:

    Any shares prior to 1998 go into pool S104
    Any shares purchased after that are matched -
    Shares bought same day as other shares are sold - are matched against each other
    Shares bought anything upto 30 days after disposal - are matched
    then as you said LIFO

    Best of Luck

    Time for some idiot tv!! before tomorrow

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