A little UK tax tip for any higher-rate UK taxpayers about to pull the plug. Thinking of
@MarcherLady - apologies if you are already all over this.
As a 40% tax payer, not only can the recipient reclaim 25% of the amount of any charitable contributions made via Gift Aid, so can you. If you are about to FIRE and stop paying HRT then it makes a lot of sense to bring forward any contributions you can into your last highly-paid tax year. I did this with a fair chunk of cash, stopping my regular contributions to the boys' school and paying a lump sum instead to cover what I would have given over the rest of their school careers and felt very pleased with myself for my cunning.
That was all well and good, but my cunning failed me when I then did my tax return for my final year of high pay just as soon as my P60 and P11D were available. NOT A GOOD IDEA. I had missed the rule which says that you can elect to carry back to the old tax year any contributions you make between the end of the tax year and the day you file your return.
Fortunately I have still had taxable income this tax year from my part time job - so at least the charities could reclaim gift aid - but I missed out on getting my own tax relief on all contributions I made between when I actually filed in May and when I should have filed in January. It's not a huge amount - the charitable contributions made by some other UK people on here put me to shame. It is enough to be mildly annoying and make me think it's worth warning others to avoid the same mistake.
