Readers' forum: Not so charitable!

A client has pension income of some £6 000 interest of £1 000 and dividends of £13 000 plus a chargeable event of £1 000 with £200 notional tax. The client also makes net gift aid donations of £1 700 so needs to cover £425 of tax on the gift aid donations.

My software shows that on the one hand the notional tax credit on the chargeable event can reduce the tax due on the dividends but it is not used to reduce the tax liability caused by the gift aid donations.

Is the software correct? I thought the notional tax credit can be used to reduce a tax liability. I could not find this example in the exclusion list.

Query 19 401– Frustrated.

Reply by Bramble

Chargeable event gains count as savings income

I assume that the amounts involved are for the 2018-19 tax year. Frustrated’s third party software...