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Health And Sickness Benefits (Taxation)

Volume 827: debated on Monday 6 December 1971

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asked the Chancellor of the Exchequer what is the standard practice of his Department in relation to the taxation of health and sickness benefits paid by insurance companies for hospital confinement up to one year; and if he will make a statement.

Lump sums received under an accident or sickness insurance policy are not regarded as income for tax purposes. Continuing benefits paid under an insurance policy during disablement through accident or sickness are assessable to tax, but in practice assessments are not raised unless the benefit has continued for at least twelve months before the commencement of the tax year in question. If the hon. Member has a particular case in mind and wishes me to look into it I shall be glad to do so.