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TaxRobin
TaxRobin, Tax Consultant
Category: Tax
Satisfied Customers: 15443
Experience:  International tax
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I was injured in a road traffic accident overseas and am due

Customer Question

I was injured in a road traffic accident overseas and am due to receive compensation for my injuries and loss of earnings.
1. Will the compensation payment need to be declared to the tax office
2. will I be required to pay tax on the amount received
3.if so how is this calculated
4. is there a taxable difference between comensation for injuries and compensation for 'loss of earnings' ?
Many Thanks
Submitted: 3 years ago.
Category: Tax
Expert:  TaxRobin replied 3 years ago.
Hello and thank you for using Just Answer,
Certain types of damages are non-taxable – for example, compensation or damages awarded for personal injury whether received in a lump sum or over a period and whether awarded by a court or agreed in an out of court settlement.
Amounts that would be paid to an injured party that relate to physical injury would not be taxable.
Unfortunately any amount that is listed as loss of earnings would be taxable.
You would need to look to the settlement agreement to determine how much of the total is for each type.
If you could have the payment all paid for the injury and not loss of earnings then none would be taxable.
I hope this information is helpful and you are mending. I too agree with your choice to seek the assistance of a tax specialist to complete your declaration for income.

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