BIM42951 - Specific deductions: compensation
& damages: general
Capital or revenue?
The deduction of compensation or damages payments depends,
broadly, on whether they were incurred:
- wholly and exclusively for trade purposes
(see
BIM42100 onwards for general guidance
and
BIM42955 on compensation/damages
payments), and
- on revenue account (see
BIM35000 onwards for the capital/revenue
distinction and
BIM42960 on compensation/damages
payments).
Compensation for loss of office paid on retirement
If compensation for loss of office is paid on retirement
(defined at EIM15022) the guidance at EIM15028 onwards should be
considered. Guidance on compensation or damages payments in
substantial cases may be obtained from CT&VAT (Technical).
- For legal costs see
BIM46400 onwards.
- For contributions to approved pension
schemes see
BIM46000 onwards.
- For redundancy payments see
BIM47200 onwards.
