Pension contributions victims to get compensation tax-free
The Inland Revenue has confirmed that compensation for mis-sold free standing additional voluntary contributions will be exempt from tax.
The move follows an annoucement by the Financial Services Authority identifying a number of specified areas where the mis-selling of FSAVCS is likely to have occurred and which should be reviewed.
A Revenue statement said that compensation for mis-selling of the specified categories of FSAVCs covered by the review could, depending on the form in which it is paid, be liable to income tax or capital gains tax.
The exemption from both these taxes provided by this concession will apply to compensation determined in accordance with the FSA Guidance for the performance of the review.