Equitable Compensation to be Tax Free

Posted: 10th August 2011

People who suffered losses as a result of the collapse of mutual insurer Equitable Life in 2000 will be pleased to know that the compensation payments they receive as a result of the passing of the Equitable Life (Payments) Act 2010 will be tax free.
The compensation on offer amounts to only 22 per cent of the amount lost and where the policyholder’s loss is deemed to be less than £10, no compensation is payable. The payments commenced in June, 2011.
Equitable Life collapsed after the House of Lords ruled that a promise made by the insurer to pay the holders of pension policies which had a ‘guaranteed minimum pension’ must be met.
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