Compensation, Is it taxable

Discussion in 'Finance, Property, Law' started by thegimp, Nov 24, 2009.

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  1. personal injury from product liability, if you received a lump sum is it taxable, in whole or part?
  2. Pararegtom

    Pararegtom LE Book Reviewer

  3. helpful if I was an accountant and knew what the feck it all meant
  4. CGT Guide

    Above confirms there's no capital gains tax on compensation, and doesn't suggest they're subject to income tax.

    Also, they aren't mentioned in the tax return guide, except to exclude interest awarded by a court as part of the compensation. (Tax return guide, TRG7)

    So, it looks like they aren't taxable, but I would call them to confirm.

    And keep evidence of the payment, in case down the line questions are asked about how this cash was acquired.
  5. cheers
  6. As Insurance Premium Tax is payable on general insurance premiums you do not have to pay Income Tax on any benefits received. So personal accident, kit, contents etc benefits are all paid tax-free

    Life insurance benefits could be hit by Inheritance Tax unless the proceeds go to the spouse or the death was as a result of military service and an exemption is claimed for and accepted.