Blogger
Share this content
0
1
587

date interest taxable

After prolonged negotiations a client received substantial settlement from local council.
The "global" settlement of circa £70000 was said to include "£23000 over and above the fair value of land (£32000)cpo'd in 1995 plus interest and all costs including any claim for loss of trade" which had not been quantified.

I am proposing to deal as follows

Capital disposal 55000 less costs paid out
Interest 15000

The total amount was paid to client 7th April 2000 by their solicitor.
As the solicitor must have received the funds before 5th April I assume it is taxable 1999/2000.
The disposal will fall in 1999/00 also as the final agreement was reached in July 1999.

Any advice/ comments

knuckles

Replies

Please login or register to join the discussion.

By admin
25th Jan 2001 16:18

2000/01
interest is taxable on the date of receipt.

I had a client once who had a bond with a franchise company which earned gross interest every year. By a previous adviser this was entered each year on his return, I corrected the previous returns and the revenue accepted the correction. The interest was entered in full in the tax year, when the bond and interest was repaid to my client on cessation of self employment.

Thanks (0)