At the point of settlement, Compensation and Personal Injury funds are non taxable -including any interest paid together with the award. From the point of settlement onwards, any income, interest or benefit derived from the award is usually taxable irrespective of the age of the recipient.
An annuity known as a periodic payment if purchased out of the proposed settlement monies is non taxable for life whereas an annuity taken post settlement is taxable and has tax deducted prior to payment of the annuity. The documentation may be misleading and inexperience of this tax situation has led to incorrect Self Assessment Returns being submitted
Certain types of award may remain non taxable and we can advise you about this.
Post settlement taxation can be quite complex as recipients of sizeable awards may have their funds invested to meet short, medium and long term anticipated expenditure. This may lead to monies being held both on and offshore in a variety of different investment vehicles. The reporting of such income may involve calculations and demand taxation knowledge beyond the experience of most laymen. Again we can help by taking this responsibility over for you.
With over 35 years experience in dealing with personal injury funds in-house we have the expertise to assist in ensuring that your taxation affairs are kept in order. Working with you and your financial advisor we can minimise your taxation and ensure that you maximise the personal allowances and reliefs available.
SBN Tax & Accounts Services Ltd 