Income Tax (Trading and Other Income) Act 2005 section 732

Compensation awards

Section 732 provides an income tax exemption for annuity payments arising from compensation awards under the Criminal Injuries Compensation Scheme or the Victims of Overseas Terrorism Compensation Scheme, and gives the Treasury power to extend similar exemptions to other personal injury compensation schemes.

• Annuity payments purchased or provided under a Criminal Injuries Compensation Scheme or Victims of Overseas Terrorism Compensation Scheme award are exempt from income tax for the persons specified in section 733
• The Treasury may, by order, extend the exemptions in sections 731, 733 and 734 (with any necessary modifications) to periodic personal injury compensation payments made under other schemes or arrangements
• The Criminal Injuries Compensation Scheme covers schemes under the Criminal Injuries Compensation Act 1995, earlier Secretary of State arrangements for criminal injury compensation, and the scheme under the Criminal Injuries (Northern Ireland) Order 2002
• "Personal injury" is defined broadly to include disease and impairment of physical or mental condition