The charity's position
Exemptions from tax are afforded in respect of certain gifts to charities to the extent that the income is applied for charitable purposes only. There are, however, restrictions on the tax relief available in some cases where the donation is 'tainted', see B5.852.
Where a gift is made to a charity by an individual and the gift is a qualifying donation for gift aid purposes, the charity is treated as receiving, under deduction of income tax at the basic rate for the tax year in which the gift is made, a gift equal to the grossed up amount of the gift1. The income tax treated as deducted is treated as income tax paid by the charity2, see E1.811.
Tax is charged on the grossed up amount of the gift arising in the tax year3. However, the gift is not taken into
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