Hepatitis C Compensation Payments

Tax Briefing, Issue 35 (March 1999) contained an article dealing with the tax treatment of Hepatitis C compensation payments.

Section 189 Taxes Consolidation Act 1997 exempts from income tax any income arising to an individual following the investment of any payment made

• to or in respect of an individual who is permanently and totally incapacitated by reason of mental or physical infirmity from maintaining himself or herself, and
• following the institution by or on behalf of the individual of a civil action for damages in respect of personal injury giving rise to that mental or physical infirmity.

Where it is medically certified that an individual is suffering from a degenerative condition which will ultimately cause a permanent and total incapacity by reason of mental or physical infirmity and the condition gave rise to the compensation payment, Revenue accepts that the requirements of subsection 1(a), section 189 Taxes Consolidation Act 1997 are met.

This applies to individuals who have been diagnosed positive for Hepatitis C antibodies or Hepatitis C.

The other provisions in section 189 Taxes Consolidation Act 1997 relating to sole or main income and returns of income continue to apply.