IPTM5060 | Periodical payments: tax exemption: persons exempt

The persons entitled to the exemption to income tax on periodical payments made under an appropriate court order, agreement or Motor Insurers’ Bureau undertaking as described in IPTM5020 are:

• the person entitled to the damages (the injured person)

• a person who receives a periodical payment on behalf of the injured person, for instance a guardian where the injured person is a minor, or a power of attorney where the injured person is incapacitated, and

• a trustee who receives a periodical payment on trust for the benefit of the injured person. This is provided the trust is one under which the injured person is the only person who can benefit from the trust whilst he or she is alive. IPTM5070 describes the tax treatment of payments from such a trust to the injured person. IPTM5090 applies to payments made from the Thalidomide Children’s Trust.