IPTM5040 - Periodical payments: tax exemption: meaning of 'personal injury': includes fatal accidents
Definition of personal injury
ITTOIA05/S731(4) states that compensation awards in respect of personal injury also include damages payments in respect of a person바카라 사이트™s death from personal injury.
바카라 사이트˜Personal injury바카라 사이트™ is not defined in tax legislation although ITTOIA05/S732 says that personal injury includes disease and impairment of physical or mental condition.
Claims or actions in UK in respect of fatal accidents
Orders of a UK court in respect of damages for personal injury made under the Damages Act 1996 extend to damages in respect of fatal accidents. This is because the meaning of 바카라 사이트˜claim or action for personal injury바카라 사이트™ in the Damages Act 1996 includes claims or actions brought under the Fatal Accidents Act 1976, or the Fatal Accidents (Northern Ireland) Order 1977.
Periodical payments might arise where, for instance, a court orders that regular payments should be paid for a certain time to the children of a person who was killed in an industrial accident. Then, the tax exemption in ITTOIA05/S731 extends to such periodical payments.
Claims or actions outside the UK in respect of fatal accidents
From 1 April 2005, where an order of a court outside the UK is similar to a UK order made under the Damages Act, periodical payments in respect of damages for a fatal accident are treated in the same way as if it was an order from a UK court. This means that periodical payments made on or after 1 April 2005 under such an order will be exempt from tax. This will be the case even if the order itself was made before 1 April 2005.
This only applies to damages for deaths. Periodical payments of damages for personal injury under an order from a foreign court have been treated in a similar way to damages under a UK order since the general exemption took effect on 29 April 1996, as described in IPTM5010.