How do I treat an insurance company payout?
Discussion
Friend of mine wanted advice as the rights to the renewal of services offered bythe mutual insurance company he is a member of has been bought out - he has subsequently received a windfall amount.
How should this be treated for tax purposes? Is this effectively a dividend and does he need to fill out self-assessment - he pays income tax through PAYE.
Other interesting bit is that he is receiving three amounts - one for himself, one for his wife (also a member) and one as a joint couple! He is a lower rate tax payer so could he allocate the joint one to his tax bill?
Any help welcome as I have never come across this!
How should this be treated for tax purposes? Is this effectively a dividend and does he need to fill out self-assessment - he pays income tax through PAYE.
Other interesting bit is that he is receiving three amounts - one for himself, one for his wife (also a member) and one as a joint couple! He is a lower rate tax payer so could he allocate the joint one to his tax bill?
Any help welcome as I have never come across this!
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