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HMRC internal manual

Residence, Domicile and Remittance Basis Manual

Remittance basis: accessing the remittance basis: remittance basis charge - nomination of foreign income and gains: charitable donations and Gift Aid

Chapter 2 of Part 8 ITA 2007 provides relief from tax for some gifts of money to charities that are made by individuals. This is known as ‘Gift Aid’. One part of the Gift Aid rules is that the donor must pay at least as much UK income tax and/or capital gains tax in the tax year as the amount that is repayable to the charity.

  • ITA07/s414(2)(a) treats a qualifying donation as if it had been made after deduction of basic rate income tax.
  • If the donor has not paid enough UK income tax and capital gains tax to ‘frank’ the gift aid donations in a tax year, a further amount of income tax is charged to make up the shortfall (ITA07/s424).

The Remittance Basis Charge

In exactly the same way as any other amount of income tax or capital gains tax, amounts of tax that are paid to satisfy the Remittance Basis Charge can be used to frank Gift Aid donations. That is because the remittance basis charge is ‘income tax charged’ or ‘capital gains tax charged’ on nominated income and/or gains.

However, where the individual has:

  • chosen to use the remittance basis, and
  • claimed Gift Aid tax relief

any income tax that is charged under ITA07/s424 is not taken into account when calculating the ‘relevant tax increase’ (see RDRM32330) that is required to produce the remittance basis charge (ITA07/s809C(5A) and s809H(5A)).


No matter how it is calculated, the Remittance Basis Charge is always £30,000 [or, in certain circumstances, from 6 April 2012, £50,000] - see RDRM32300.