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Why are structured settlements tax-free?

April 26, 2017Free settlements structured tax

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Why are structured settlements tax-free?

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In Canada, compensation for personal injuries is tax-free whether the award or settlement is made by a lump sum or by periodic payments.The Canadian Customs and Revenue Agency (CCRA) published on May 8, 1987 an Interpretation Bulletin regarding structured settlements. This bulletin is reproduced below, or link herehttp://www.ccra-adrc.gc.ca/E/pub/tp/it365r2/it365r2-e.html.