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Winning treasure from the courts - treatment of compensation payments and damages awards paper

Published on 07 Oct 06 by VICTORIAN DIVISION, THE TAX INSTITUTE

Suppose a client is offered compensation either for his consent to the cancellation of valuable rights, or to settle a claim for personal injury or unfair discrimination. To deliver the best after tax outcome tax practitioners need to be aware of the possible pitfalls. This paper considers a number of practical case studies exploring:

  • how damages, costs and pre and post judgement interest are taxed
  • when they are deductible on ordinary principles or under the new black hole expenditure provisions
  • when they are consideration for taxable supplies or give rise to an entitlement to an input tax credit
  • indemnities, damages for breach of warranty, reimbursements and liquidated damages clauses in contracts
  • difficulties arising when taxation of damages becomes an issue in the conduct of litigation.

Author profile:

Michael HINES
Current at 22 June 2009 Click here to expand/collapse more articles by Michael HINES.
 

 

This was presented at 45th Victorian State Convention: Finding buried treasure .

Get a 20% discount when you buy all the items from this event.

Individual sessions



CGT Rollovers: restructuring for the top end

Author(s):  Richard CZERWIK,  Stephen CARPENTER

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International tax - there's treasure buried all over the world

Author(s):  Liam COLLINS

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Consolidation...unfinished business

Author(s):  Michelle DE NIESE

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The 'ins' and 'outs' of testamentary trusts

Author(s):  Bruce COOK

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Exploring new waters - emerging trust issues

Author(s):  Graeme HALPERIN

Materials from this session:


Further details about this event:

 

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