#2026/584Income tax exemption for Successful Legacy Appeals Scheme compensation
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This law makes compensation payments under the Successful Legacy Appeals Scheme free from income tax. It applies to payments made by the Department for Work and Pensions in Great Britain and equivalent payments made by the Department for Communities in Northern Ireland. The scheme covers people who lost money after they had to move from an existing benefit to universal credit because of a decision that was later changed, overturned, or cancelled. For affected claimants, the practical result is simple: compensation received on or after 14 May 2026 should not be taxed as income.
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Key Changes
- Exempts Successful Legacy Appeals Scheme compensation payments from income tax
- Covers payments made in Great Britain and equivalent schemes in Northern Ireland
- Applies to qualifying compensation received on or after 14 May 2026
Obligations
What this law requires
Treat compensation payments made by the Department for Work and Pensions under the Successful Legacy Appeals Scheme as qualifying payments exempt from income tax when received on or after 14 May 2026.
Treat equivalent compensation payments made by the Department for Communities in Northern Ireland under a corresponding Successful Legacy Appeals Scheme as qualifying payments exempt from income tax when received on or after 14 May 2026.