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A company received a sum described as compensation and/or restitution following a successful claim against HMRC.
The claim was in respect of advance corporation tax (ACT) paid from 1993 to 1996 under a mistake of law and for interest thereupon until the date of settlement and the sum received precisely matched the claim to the principal and interest.
The return of the ACT represents the refund of taxes that but for the mistake of law would never have fallen due and is assumed to be non-taxable. The interest in question ran from the dates of payment of the ACT until settlement of the claim at the reference rate plus 1%.
This formula basis remained the same throughout the period i.e. before and after the introduction of corporation tax self assessment.
Is this interest non-taxable due to the material date predating self-assessment or is it only taxable...
