Charitable Gratuitous Transfers

@Reena‌ things are slightly different though interesting some of the stuff are repeating a little on some topics.

I’m aiming to finish by end of march but might overrun by a few days into April, we shall see..

@Reena‌ no prob at all, just trying to synchronize the syllabus with what I know of a real life example.

Thanks for the info, how’s revision so far?

@fabian‌ haha this is gift tax by me, nothing to do with your income 😛

So what if the tax is 140%, are you still keen? (I don’t mind double taxed in this case)

I think i got it now! Ignore this post.

@sophie haha.

Well, there isn’t really an answer to this as the CFA’s method is very likely to be a US system so perhaps different to the gift aid scheme in the UK.

Basically, I think CFA assumes that by donating to the charity now you are able to get some tax deduction and they assume the tax deduction is “credited” back into your account as an asset (which you are better off than not donating to a charity). Then assume you’ll gain after tax return and then get taxed (estate/gift tax) when the donor pass it on as a gift or bequest.

My concept was that since you are donating amount X to a charity, the charity is able to get an additional amount x * Toi from the tax office (gift aid scheme). Hence, the formula in the second part of the numerator will be different.

@Sophie‌ it seems like there’s a lot of focus on how to be more tax efficient. We shall see when I hit the question.
By the way, is it advisable to practice the morning session (essay) with the past years papers? If so, up to how many years before the syllabus changes too much?

@fabian‌ I could but you will be taxed at a very high rate!