Tip to save tax who has net income of over £100,000

Tip to save tax who has net income of over £100,000  

When it comes to saving tax, everyone will raise their hands and try to save as much as they can. Ofcourse this can be done by a professional accountant. Brayan & Spencer is one of them.

What if you have more than hundred thousands of Net income and you are seeking a way out to save tax or get benefit out of it. Well, Brayan and Spencer have expertise in saving money of the tax payers of London and I (on behalf of Brayan and Spencer) would like to share a tip of recent case study encountered by me which gave my client a benefit.

Problem: My client’s 2017/18 net income is just over £100,000 and their personal allowance is being tapered. Is there anything that can be done now?


Solution by Brayan and Spencer, London:

Your client can make a qualifying gift aid donation before their 2017/18 tax return is submitted and treat the gift aid donation as being made in the 2017/18 tax year.

Although your client will still technically be out of pocket after making the donation, their chosen charity will enjoy an additional 20% increase on the donation made by your client and your client will receive marginal tax relief of 60% (40% plus the 20% relief lost with the persona allowance tapering).

It is also possible for the taxpayer to make a donation rather than pay a 60% marginal tax rate on some of their income, through a qualifying donation.

The ‘carry-back’ of qualifying gift aid donations could also be beneficial for taxpayers with annual income which exceeds the £50,000 threshold for the high income child benefit charge. In this instance, they could make sufficient donations to bring their adjusted income below the threshold.

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