Malcolm Finney explains the concept of the ‘double dip’ in relation to charitable donations by individuals under gift aid.
Individuals are encouraged to make gifts to charities by the granting of income tax or capital gains tax (CGT) relief. Such relief is available if the individual donor makes a gift which qualifies for gift aid relief (GAR) (ITA 2007, ss 413-430).
GAR necessitates satisfaction of various conditions, including that the gift must be of money; the donor (or a person connected; ITA 2007, s 993) must not receive any benefits in consequence of making the gift (subject to limits); and the donor must be charged to income tax and/or CGT of an amount at least equal to the income tax treated as deducted from the donation (in the tax year it is made).
Gift aid: The mechanics
