IPTM5090 | Payments to Thalidomide victims from the Thalidomide Children's Trust

The Thalidomide Children’s Trust (Application of Section 329AA of the Income and Corporation Taxes Act 1988) Order 2004 came into effect on 5 August 2004. Before this date, income payments from the Thalidomide Trust were subject to the same tax rules as other trusts.

As a result of this order, where a series of recurrent payments is made from the Thalidomide Children’s Trust to a Thalidomide victim, those payments are exempt from tax in a similar way to periodical payments of damages for personal injury under a court order.

All such payments to the Thalidomide victim and any person receiving the payment on his or her behalf made on or after 5 August 2004 when the order took effect are exempt from tax.

Income payments made before 5 August 2004 are taxable under the normal trust rules. More guidance on payments made before 5 August 2004 can be found at TSEM5954.