Compensation: Income Tax and Inheritance Tax
Commons · Question 117442 · Tabled 3 Mar 2026 · Treasury · Official record
Answered 11 Mar 2026
Question
Asked by Matt Vickers
To ask the Chancellor of the Exchequer, what criteria the Government uses to determine whether payments made under a Government compensation scheme are exempt from (a) income tax and (b) inheritance tax.
Answer
Answered by Dan Tomlinson, 11 Mar 2026
Some payments made under Government established compensation schemes will not give rise to an income tax liability. This is because payments intended to compensate individuals for personal injury would generally fall within established tax principles that...