I am looking at a case where on basic information for the year the client has dividends and interest in 0% and on non savings income just creeps into 40% so MAT would not be available.
But if he elects to transfer a small amount of Gift aid back from 2017-18 he can get to a position where he is no longer liable at other than the BR.
The legislation says that the conditions are:
(a)the individual is married to... a person who makes an election under section 55C for the purposes of this section which is in force for the tax year ...,
(b)the individual is not, for the tax year, liable to tax at a rate other than the basic rate, the dividend ordinary rate or the starting rate for savings,
It seems to me (unless I have missed something) that before the GA carry back he meets (a) but fails (b) so cannot receive the MAT, but after the carry back in the return he then meets both (a) and (b) and MAT should be available. Unfortunately Taxfiler will not let me finalise a return with MAT received even after including the carry back election so there is no liability above BR for the year.
I wondered whether it might be because it's a carry back but the treatment for GA isn't the same as for losses carried back where it is a tax adjustment for the CY based on the assumption that the PY liability is reduced. FA 2002 s98(4) says:
"The effect of an election under this section is that the provisions of section 25(6) to (9A) of the Finance Act 1990 (c. 29) have effect in relation to the donor as if the gift were a qualifying donation made in the previous year of assessment."
The treatment is that the PY liability is actually reduced, not a stand alone tax adjustment and it seems to me that the MAT should be available once the carry back election is made.
Can anyone point me to what I have missed the means that the GA c'back is ignored in considering MAT limits? If not I need to include the election in the original return to be submitted not as a later amendment that will fail after Cameron (TC00415)