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Are Personal Injury Settlements Taxable in the UK?

It is a common concern for individuals involved in a personal injury claim as to whether or not any financial compensation awarded in court, or in an out of court settlement, will be taxable.

Tax laws in the United Kingdom are complicated, and it can often be easy to fall foul of them.

1: What are personal injury settlements?

Personal injury settlements are financial compensation awarded as a result of an injury caused by something other than the person who sustained the injury.

Personal injuries are varied in nature, and can include lesser injuries such as a sprain or broken leg, to more serious and life changing injuries such as brain damage.

Depending on the individual case, the circumstances, and the evidence involved, personal injury compensation can range from a few hundred pounds to millions.

It can be a long and time consuming process being awarded a personal injury settlement, and it may involve a number of court appearances, and negotiation with the party at fault, depending on the circumstances.

You may be able to reach an agreement out of court, or if not, the case will be decided by a judge in court.

2: What does the law say about the tax status of personal injury settlements?

The law says that compensation or damages awarded for personal injuries, whether received as a single lump sum, or over a period of time, and whether awarded by a court or an out of court settlement, are tax free.

3: What if I have further questions?

If you have further questions or queries concerning a personal injury, personal injury settlement or other issue, your solicitor, if you have one, will be able to help you.

However, you may also wish to contact the site’s editor, Gavin Ward, who will be happy to help you. Please contact Gavin using the contact form, or by email.

WardBlawg

WardBlawg

Legal Blogger at WardBlawg
+Gavin Ward is the founder of WardBlawg, Director of YouBlawg Limited and Operations Director at Moore Legal Technology Limited, specialising in helping law firms, lawyers and businesses grow their businesses online and aiming to help get great legal content published and shared across the web. Gavin created this law blog or ‘blawg’ to aim to contribute useful updates, thoughts and advice to help law firms, businesses and the legal profession in the UK and across the world succeed both online and offline.
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