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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13858
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As a result of a fatal accident our granddaughter was killed

Customer Question

As a result of a fatal accident our granddaughter was killed last September in Scotland where she lived with her Mum(our daughter) and her two siblings.
The civil case on behalf of her family against the third party driver was due to go to court in the coming months but has now been settled out of court.
The third party driver's insurance company has agreed to pay both parents, both siblings and both sets of grandparents under Scottish Law.
Both my wife and I are to receive a net sum in total of £44,880 ........is this payment taxable under UK tax laws?........My wife does not pay income on her small state pension and I pay basic tax on my pensions.
Submitted: 1 year ago.
Category: Tax
Expert:  Sam replied 1 year ago.
Hi Thanks for your question and I am so sorry to hear of this tragic loss to you and your family. I am please to say that no compensation claims settled in or out of court under these circumstances have any liability to tax, as paid due to the loss you have suffered and bears no gain in the equation.Only should you invest or save this money and then unearned income be generated from it - such as interest (if placed in a bank or building society) or if you purchased shares - then any dividend payout - would need to be considered in the coming years. Let me know if I can be of any further assistance. ThanksSam

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