Income Tax Act 2007 section 838A

Asbestos compensation settlements

Section 838A provides an income tax exemption for trustees of settlements established to compensate individuals affected by asbestos-related conditions.

• Trustees of qualifying asbestos compensation settlements pay no income tax on the trust's income
• The settlement must have as its sole or main purpose making compensation payments to individuals with asbestos-related conditions, or to those connected with individuals who died from such conditions
• The settlement must have been established before 24 March 2010 under a formal insolvency or company law arrangement (such as a voluntary arrangement or scheme of arrangement)
• Equivalent overseas arrangements also qualify, provided they correspond to the UK insolvency or companies legislation mechanisms