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Can you claim gift aid relief on a donation made after you leave the UK?

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Can you claim gift aid relief on a donation made after you leave the UK?

edited 30 November -1 at 1:00AM in Cutting Tax
5 replies 1.9K views
cautiousjoncautiousjon Forumite
101 posts
edited 30 November -1 at 1:00AM in Cutting Tax
[Disclosure: Cross posted on britishexpats forums but figured that MSE Forum would likely have more knowledgeable people]

Hi,

I moved to California a few weeks ago and got paid my last UK salary payment on the day after I left the country. I have just received my P45 from my previous UK employer (who posted it to USA) and I am now filling in a P85 to reclaim any tax owing.

When I was in the UK, I used to give regularly to a charitable organization that is registered as a Gift Aid claimant with HMRC. A few months ago, I asked HMRC to adjust my tax code to account for higher rate tax relief on some regular monthly giving, to avoid me having to reclaim it later on. I have since made additional contributions (when I was in UK), so I will write an additional letter detailing this when I send in my P85 and P45.

A few days ago, I made a fairly large one-off donation to the same charitable organization in the UK. My question is, can I reclaim higher rate tax relief on that gift, even though I have already left the UK? I am still tax resident in the UK until 6 April 2015.

Thanks,
Jon

Replies

  • SpidernickSpidernick Forumite
    3.8K posts
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    With Gift Aid you need to have paid enough tax in the year to cover the amount claimed back by the charity (£2 for every £8 net donation), otherwise this can, in theory, be clawed back from you. You'll be fine this year, as you have paid tax. If your taxable salary takes you into the 40% band for 14/15 (and bear in mind that you have left part way through the year and it sounds as if your salary in the US won't be taxable in the UK) then you'll get the higher-rate relief on this.

    If you want to make charitable contributions for full years of non-tax residence in the UK then, unless you still have to pay UK tax (which would normally only be on UK rental profits over your personal allowance) then you should tell the charity not to reclaim the tax, for the reason cited above.

    By the way, you may not be a UK-tax resident until 5 (not 6) April 2015. It depends on a number of factors and you may be able to split the year into resident and non-resident periods.
    'I want to die peacefully in my sleep, like my father. Not screaming and terrified like his passengers.' (Bob Monkhouse).

    Sky? Believe in better.

    Note: win, draw or lose (not 'loose' - opposite of tight!)
  • Hi Spidernick,

    Thank you for your prompt reply. Before I left the UK, my company gave me a few hours of tax advice from Deloitte and the tax advisers informed me that I am not eligible for split tax year residency status because I am unfortunately about three weeks over the 183 day residency test.

    It sounds like I can qualify for higher rate tax relief on the extra gift that I made. However, since writing the OP, I've worked out that I have only just fallen into the higher rate tax bracket, once I accounted for the full personal allowance. This means that the higher rate tax relief on my donations won't be that much in the end. Oh well, I'll still qualify for a few thousand pounds back. :D

    Thanks again,
    Jon
  • SpidernickSpidernick Forumite
    3.8K posts
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    Hmm, depends on how long you are going for and whether you will be 'Full Time Working Abroad' there, likely return visits, etc, in terms of split year. If you are retiring there then, yes resident for 14/15, but probably treaty resident in the US following departure (if you are moving home, finances, etc. there) which means that your income following departure shouldn't be taxable in the UK (bar any UK rental income, as above and possibly certain UK pension income), but would still need to be reported on your 14/15 tax return but then backed out on the treaty pages.
    'I want to die peacefully in my sleep, like my father. Not screaming and terrified like his passengers.' (Bob Monkhouse).

    Sky? Believe in better.

    Note: win, draw or lose (not 'loose' - opposite of tight!)
  • Cook_CountyCook_County Forumite
    3.1K posts
    Part of the Furniture 1,000 Posts
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    But you would have saved UK, US and California tax if you had donated via a dual qualified charity.
  • Cook_CountyCook_County Forumite
    3.1K posts
    Part of the Furniture 1,000 Posts
    ✭✭✭✭
    Hi Spidernick,

    Thank you for your prompt reply. Before I left the UK, my company gave me a few hours of tax advice from Deloitte and the tax advisers informed me that I am not eligible for split tax year residency status because I am unfortunately about three weeks over the 183 day residency test.

    It sounds like I can qualify for higher rate tax relief on the extra gift that I made. However, since writing the OP, I've worked out that I have only just fallen into the higher rate tax bracket, once I accounted for the full personal allowance. This means that the higher rate tax relief on my donations won't be that much in the end. Oh well, I'll still qualify for a few thousand pounds back. :D

    Thanks again,
    Jon
    Did the guys at Deloitte forget to tell you that the tax treaty over-rides domestic law?
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