Compliance
Tax Compliance: Understanding the Post Office Capture Redress Scheme Exemptions
Compensation under the Post Office Capture Redress Scheme now carries specific tax exemptions—find out what reliefs apply for different taxes and how to make sure you benefit if you're eligible.
By NomadicTax Research Team • 5-8 min read • November 22, 2025
## What Is the Post Office Capture Redress Scheme?
The Post Office’s **Capture system** resulted in serious miscarriages of justice affecting numerous subpostmasters. In June 2025, the Government introduced a **scheme to compensate** those adversely affected. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai)) A recent regulation provides **tax exemptions and reliefs** for payments under that scheme as of 20-27 November 2025. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
## Taxes Affected and What’s Exempted
| Tax Type | What Is Exempt / Relieved | Effective Date |
|---|---|---|
| Income Tax | Payments under the Redress Scheme to individuals are **qualifying payments exempt from income tax** ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai)) | From 27 October 2025 onwards for payments received ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai)) |
| Capital Gains Tax | Payments are **qualifying payments exempt from CGT** on disposals made on or after 27 October 2025 ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai)) |
| Inheritance Tax | Relief is given for qualifying redress payments for deaths occurring on or after 27 October 2025 ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai)) |
| Corporation Tax | Relevant payments received are treated as exempt from corporation tax as of 27 October 2025 ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai)) |
## How to Make Sure You’re Covered
- **Check whether you are a “nominated individual”** under the scheme (shareholder, director or partner in a now-dissolved entity previously eligible). If so, you qualify for exemptions or reliefs. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
- **Ensure payments are made under the scheme**—keep documentation and official communications showing payments are under the Redress Scheme, to prove tax treatment. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
- **Timing matters**: Payments and disposals must fall on or after **27 October 2025** for income tax, corporation tax, and capital gains exemptions; and deaths on or after that date for inheritance tax relief. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
## Practical Examples
- A subpostmaster receives **£50,000** compensation from the Redress Scheme on 30 October 2025: this payment is **exempt from income tax**. No income tax needed. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
- If that payment came with a disposal of an asset (e.g. sale of business interest), any **gain** made on or after 27 October 2025 would be **exempt from CGT**. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
- In a case of survivorship, if someone who died on 1 November 2025 would have been eligible, inheritance tax relief applies to the payment. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
## Key Takeaways and Action Steps
- **Make a self-assessment check**: See if you’re a nominated individual or entitled to payments under the scheme.
- **Track timelines closely**: Qualifying dates are legally binding; anything before 27 October for assets/disposals or death won’t qualify. ([legislation.gov.uk](https://www.legislation.gov.uk/uksi/2025/1130/made?utm_source=openai))
- **Save your records**: Payment notices, correspondence under the Redress Scheme are vital for HMRC verification.
- **Seek advice** if mixed incomes/assets around those dates—there may be interactions with other reliefs or tax treatments.
This change ensures many affected by the Capture miscarriage get tax relief on what they receive—but only if the payments and disposals or events are on or after the effective dates.