(1)The following interest shall not be regarded as income for any income tax purpose—
(a)any interest on damages in respect of personal injuries to a plaintiff or any other person, or in respect of a person’s death, which is included in any sum for which judgment is given by virtue of a provision to which this paragraph applies; and
(b)any interest on damages or solatium in respect of personal injuries sustained by a pursuer or by any other person, decree for payment of which is included in any interlocutor by virtue of section 1 of the [1958 c. 61.] Interest on Damages (Scotland) Act 1958.
(2)The provisions to which subsection (1)(a) above applies are—
(a)section 3 of the [1934 c. 41.] Law Reform (Miscellaneous Provisions) Act 1934;
(b)section 17 of the [1937 c. 9 (N.I.).] Law Reform (Miscellaneous Provisions) Act (Northern Ireland) 1937;
(c)section 35A of the [1981 c. 54.] Supreme Court Act 1981;
(d)section 69 of the [1984 c. 28.] County Courts Act 1984;
(e)section 33A of the [1978 c. 23 (N.I.).] Judicature (Northern Ireland) Act 1978; and
(f)Article 45A of the [S.I. 1980/397 (N.I. 13).] County Courts (Northern Ireland) Order 1980.
(3)A payment in satisfaction of a cause of action, including a payment into court, shall not be regarded as income for any income tax purpose to the extent to which it is in respect of interest which would fall within subsection (1) above if included in a sum for which a judgment is given or if decree for payment of it were included in an interlocutor.
(4)In this section “personal injuries” includes any disease and any impairment of a person’s physical or mental condition.