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Charitable donation of profit from FHL

10/05/2019 13:58:29
My partner is considering buying a FHL and making a charitable donation of the profit from it. He is a higher rate tax payer. Would he pay higher rate tax on the income from the FHL, or how would the charitable donation alter the tax position?
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Re:Charitable donation of profit from FHL

13/05/2019 07:28:07
Hi,

Thank you for your question.

If your partner's income, including the income from he FHL exceeds the basic rate band then he will be liable to higher rate tax on the amount of income that exceeds the basic rate band.

If he also makes a charitable donation then the basic rate band will be increased by the gross amount of this donation which would mean that he would pay less tax at the higher rate.
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Charitable donation of profit from FHL

13/05/2019 08:28:44
The income from the FHL would be taxable at higher rates. If the charitable donation is gift aided he would get tax relief at higher rates as the basic rate band is extended by the grossed up amount.

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