Personal Tax exam - help please

bluesky

Hi there

I am taking the Personal Tax exam on Friday, & wondered if anyone could help me with Gift Aid/pension contributions.

When someone makes a Gift Aid donation/pension contribution, is the gross figure always deducted from employment income before the personal allowance is calculated, or does this just happen if the total income is more than £100,000?

I thought it was only if the income is more than £100,000 but I'm getting a bit confused.

Thanks very much
Ann

gibbo

Hi, I think you are getting confused. If example 100 Net gift aid (125 Gross) then the 37,400 Basic rate bracket will be increased to 37,400 +125 = 37,525. Same as pension contributions. Ignore the 100,000 for now.

Best of luck, i have my exam next thursday!