HMRC has revised extra statutory concession D33 with effect from 27 January. The concession applies to compensation paid as a capital sum rather than income, and applies to corporation tax on a company’s chargeable gains as well as capital gains tax for individuals. If the compensation can be linked to a chargeable asset, it is taxed as a capital gain relating to that asset. This will not change, HMRC said. Where there is no link, the concession treats the compensation as exempt. From 27 January, only the first £500,000 of this kind of capital compensation will be exempt, and HMRC ‘will not normally provide relief above that amount’. However, anyone who receives compensation of more than £500,000 and thinks it should not be chargeable can ask HMRC to ‘consider whether further relief can be given’.
HMRC has revised extra statutory concession D33 with effect from 27 January. The concession applies to compensation paid as a capital sum rather than income, and applies to corporation tax on a company’s chargeable gains as well as capital gains tax for individuals. If the compensation can be linked to a chargeable asset, it is taxed as a capital gain relating to that asset. This will not change, HMRC said. Where there is no link, the concession treats the compensation as exempt. From 27 January, only the first £500,000 of this kind of capital compensation will be exempt, and HMRC ‘will not normally provide relief above that amount’. However, anyone who receives compensation of more than £500,000 and thinks it should not be chargeable can ask HMRC to ‘consider whether further relief can be given’.
