Court Case Settlement Tax

[cambo_gueno]

can anyone tell me if a civil court case settlement is subject to any kind of tax? I wouldn't have thought so, but I wouldn't put it past the current government.

Apols if this has been asked before

 

[Allen]

I suspect it depends what the settlement was for. I think (but am no expert) if the settlement is for damages then there is no tax - as it is just replacement for damage incurred and not an income or capital gain.

 

[Kitty Kat]

In general compensation for injury is not taxable and there is often special treatment for other types of compensation, for example - compensation for loss of office/breach of contract is often taxable, certain payment made under employment law are exempt but you must fit the criteria of which there are many stipulations.