SUBSCRIPTIONS UNDER COVENANT
[To the Editor of THE SPECTATOR] SIR,—Mr. Sack is not strictly correct when he states that : "(b) If a subscriber does pay Income Tax at the full rate, a seven-year covenant will normally benefit the receiving charity without additional cost to the subscriber."
In the fairly common case of the subscriber not having an investment (unearned) income equal at least to the gross amount of the annuity and being in receipt of earned income not exceeding £1,500 per annum, his earned income relief will be subject to restriction.
The amount of the annuity may also affect, to the subscriber's disadvantage, the extent of life assurance relief.
These observations of mine are not meant to discourage the system of subscribing under covenant, but are made to ensure strict accuracy.—Yours faithfully, A. G. MCBAIN. 55 West Regent Street, Glasgow, C.2.
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