Consequential Loss

When the insurer pays the insured for consequential loss for the indemnity period, is the payout taxable? As this could count as profits of the insured?

Thanks

 

see unit 5 - 7.3 Claims

You are right for UK companies Claims payments will be taxable for business policyholders where they “replace” lost profits that would be subject to tax; such claims are therefore paid gross and are taxable in the hands of the policyholder. according to the SA3 notes on the unit headed Taxation.

Whether the claim payment profits correspond to the accounting profits is another matter and this reply is for UK companies.

 

Thanks!