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Injury to feelings are (almost always) taxable under a settlement agreement

Very often it is in at least one party’s interest in a settlement agreement to seek to ‘structure’ the global payment in a particular way. However in light of the case discussed in Paul Strelitz's article, now the route to a more beneficial tax position has been substantially narrowed and it is clear that drafters should also be wary of allowing their clients to believe that such artificiality enjoys any particular level of certainty.

Read Paul Strelitz's article