ABSTRACT
There are, essentially, two issues concerning tax and the assessment of compensation. First, what items of compensation that have been agreed with the acquiring authority, or assessed by the Lands Tribunal, are then subjected to either income or capital gains tax when paid to the claimant. Second, to the extent that items of compensation are taxed in the hands of the claimant, should the compensation sum be increased to allow for the tax and leave a net sum that represents not less than the claimant’s loss to ensure that he is no worse off because of the acquisition; or, should the compensation be decreased, if it relates to items such as loss of profits, or payment of removal expenses, because tax would have been paid on the profits had they been earned or the expenses are tax deductible. Rollover may be available for both land taken and disturbance compensation.
