PHI payments, (claims)

[ASB]

Since I don't have an accountant I cant ask them. :-)

I also can't find the specific answer for this specific situation.

I am entitled to some long terms sick pay, and then PHI kicks in. However the PHI is not provided by the employer, it is provided by the pension scheme (which happens to be money purchase). [Pension contributes are paid by the employer and myself via salary sacrifice]. There is no bik tax paid by be on the notional value of the premiums.

There is no realistic prospect of a return to work and benefits are expected to be received until normal retirement age.

I am assuming that the benefit would be taxable, but they are being paid as a result of disability covered by the equality act.

https://www.gov.uk/hmrc-internal-man...anual/iptm6110

There are some cases where the benefits do not count as income. But I can't figure out if my case might be expempted (I doubt it but it would be nice).

As an alternative a settlement agreement may be negotiated. In this case I'm pretty sure that this would be taxable as income in the year it is paid - with the first 30k being tax free.

re

[northernladuk]

Have you asked...

Since I don't have an accountant I cant ask them. :-)

Ah crap...

Have you tried a..

I also can't find the specific answer for this specific situation.

Dagnabit...

Hope this isn't the start of a worrying trend

[Old Greg]

Have you asked...



Ah crap...

Have you tried a..


Dagnabit...

Hope this isn't the start of a worrying trend

You need a new line:

Get an accountant.

Everything else will fall into place.

[Old Greg]

Since I don't have an accountant I cant ask them. :-)

I also can't find the specific answer for this specific situation.

I am entitled to some long terms sick pay, and then PHI kicks in. However the PHI is not provided by the employer, it is provided by the pension scheme (which happens to be money purchase). [Pension contributes are paid by the employer and myself via salary sacrifice]. There is no bik tax paid by be on the notional value of the premiums.

There is no realistic prospect of a return to work and benefits are expected to be received until normal retirement age.

I am assuming that the benefit would be taxable, but they are being paid as a result of disability covered by the equality act.

https://www.gov.uk/hmrc-internal-man...anual/iptm6110

There are some cases where the benefits do not count as income. But I can't figure out if my case might be expempted (I doubt it but it would be nice).

As an alternative a settlement agreement may be negotiated. In this case I'm pretty sure that this would be taxable as income in the year it is paid - with the first 30k being tax free.

re

May be worth taking this one to a disability forum or asking a disability charity or similar? Best of luck, anyway.

[ASB]

May be worth taking this one to a disability forum or asking a disability charity or similar? Best of luck, anyway.

It will become clearer as it develops.

https://www.taxation.co.uk/articles/...nal-settlement

This seems to suggest that the benefit would be taxable as income (which seems reasonable), but it also seems that a settlement has some chance of not being taxable. In my case the benefits will be paid (assuming the claim is successful) will be paid by the pension fund rather than the employer.

It's mainly of interest in where to pitch any full and final settlement offer since that will be a large lump and would end up with a lot of 45% tax which is likely to make negotiations fail since a lump sum, if taxable, would need to be considerably more than the total benefit which would otherwise be payable.

A disability forum is a good idea. Why didn't I think of that.

[Old Greg]

It will become clearer as it develops.

https://www.taxation.co.uk/articles/...nal-settlement

This seems to suggest that the benefit would be taxable as income (which seems reasonable), but it also seems that a settlement has some chance of not being taxable. In my case the benefits will be paid (assuming the claim is successful) will be paid by the pension fund rather than the employer.

It's mainly of interest in where to pitch any full and final settlement offer since that will be a large lump and would end up with a lot of 45% tax which is likely to make negotiations fail since a lump sum, if taxable, would need to be considerably more than the total benefit which would otherwise be payable.

A disability forum is a good idea. Why didn't I think of that.

Multiple identities I guess: contractor and disability.

[SueEllen]

It will become clearer as it develops.

https://www.taxation.co.uk/articles/...nal-settlement

This seems to suggest that the benefit would be taxable as income (which seems reasonable), but it also seems that a settlement has some chance of not being taxable. In my case the benefits will be paid (assuming the claim is successful) will be paid by the pension fund rather than the employer.

It's mainly of interest in where to pitch any full and final settlement offer since that will be a large lump and would end up with a lot of 45% tax which is likely to make negotiations fail since a lump sum, if taxable, would need to be considerably more than the total benefit which would otherwise be payable.

A disability forum is a good idea. Why didn't I think of that.

A disability forum would be good as I remember someone years ago telling me their payments depended on only earning a certain amount if they could ever earn again. They also worked out they would be out of pocket if they took a lump sum due to their life expectancy.