Question to the HM Treasury:

To ask the Chancellor of the Exchequer, whether money a person receives from their pension scheme via the Fraud Compensation Fund is taxable; and if he will make a statement.

The Fraud Compensation Fund pays compensation to pension scheme administrators or trustees, who then provide benefits to members. Those benefits will be taxed like any other pension benefits. An individual pays income tax if their total annual income is more than their Income Tax Personal Allowance which is currently £12,570. Where an individual has income above the Personal Allowance, payments of pension (including pension benefits arising from a compensation payment) is subject to income tax, which is collected through Pay As You Earn.