Part 6

Exempt income
Chapter 9

Other income

Interest only income

Interest on damages for personal injury
751
1
No liability to income tax arises in respect of interest on damages for personal injury or death if—
a
it is included in a sum awarded by a court,
b
it does not relate to the period between the making and satisfaction of the award, and
c
in the case of an award by a court in a country outside the United Kingdom, it is exempt from any charge to tax in that place.
2
No liability to income tax arises in respect of interest if—
a
it is included in a payment in satisfaction of a cause of action (including a payment into court), and
b
it would fall within subsection (1) if it were included in a sum awarded by a court in respect of a cause of action.
3
In subsection (1)—
- “damages” in Scotland includes solatium, and
- “personal injury” includes disease and impairment of physical or mental condition.