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Tax Chat

Compromise Agreements may not always be fully taxable

Compromise Agreements may not always be fully taxable

Recent case law emphasises that the tax position regarding amounts payable under compromise agreements may not be as straightforward as first thought.

Most people are aware that there is a tax exemption which can cover the first £30,000 of any payment made, however it is rarely just as simple as this.

There are other provisions which may take the payment fully outside the charge to tax. For example, payments for injury to feelings or racial discrimination can be outside of the tax net completely.

The amounts involved in such cases are typically significant and so it is worth seeking tax advice especially to ensure that the best position is achieved.

If you have any questions please do not hesitate to contact Lesley Sutton on 01484 550 037 or email for more details.

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