Commentary

E1.564 Interest on damages for personal injury

Personal and employment tax

E1.564 Interest on damages for personal injury

E1.564 Interest on damages for personal injury

Interest on damages for personal injury1 is exempt from tax provided that certain conditions are met.

In particular, no liability to income tax arises in respect of interest on damages for personal injury or death if it is included in a sum awarded by a court, it does not relate to the period between the making and satisfaction of the award, and, in the case of an award by a court outside the UK, it is exempt from any charge to tax in that place2.

In addition, interest is exempt from income tax if it

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