Business

Wednesday 13 November 2019

Equitable Life policyholders could face tax bill on compensation

A woman reads a report into the collapse of Equitable Life. Picture: Reuters
A woman reads a report into the collapse of Equitable Life. Picture: Reuters
Gavin McLoughlin

Gavin McLoughlin

Irish people who had life assurance policies with Equitable Life could have to pay tax on the compensation they receive from the UK Government.

Around 6,500 people here suffered losses on their pensions, savings and investments when the company went bust.

Revenue said those who get their compensation as a lump sum won't have to pay tax, but those who get it paid as part of their pension annuity will face income tax.

It also said members of defined contribution schemes are subject to income tax on the payments, but members of defined benefit schemes are not.

The tax collectors said the compensation "may" be exempt from capital gains tax.

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