Compensation received on account of Accident

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STUDENT
3 Points Posted on 26 August 2020
Hi,
One of my client received huge amount of compensation from United Insurance company on account of Accident.

What's the tax liability on compensation and interest earned on compensation
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On 26 August 2020 at 19:00 Report
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Quick Summary
This discussion clarifies the tax treatment of compensation received for accidents in the UK. Generally, the compensation itself is considered a capital receipt and is exempt from tax, provided certain conditions are met. However, any interest earned on this compensation is taxable under the 'Income from other sources' category.

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Tax and Business Consultant
11616 Points Posted on 26 August 2020
Compensation received on account of accident is considered as Capital receipt and Exempt from tax subject to conditions.
Interest received on Compensation is taxable as " Income from other sources".
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On 26 August 2020 at 19:26
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STUDENT
3 Points Posted on 26 August 2020
Thank you,
in which section exemption will be claimed Sir...
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On 26 August 2020 at 19:30

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