Tax exemption for corporate recipients of compensation payments under the Post Office compensation schemes
This measure provides details of the taxation of corporate recipients and the ultimate recipients of an onward payment of compensation payments made under the Post Office Group Litigation Order or Horizon Shortfall Scheme.
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This measure provides that the ultimate recipient of the compensation should be taxed in a similar way to an individual who received the compensation directly. This could be a shareholder, director or employee of a company that was entitled to receive compensation under either the Group Litigation Order Scheme or the Horizon Shortfall Scheme.
This means that Group Litigation Order recipients should be fully exempt at both the corporate level and any onward payment. The Horizon Shortfall Scheme recipients are exempt at the corporate level, but the onward payment to individual recipient remain taxable to the extent the original source of compensation was taxable. Any amount of the payment which is made to resolve an increase in the rate of taxation will be exempt.