What is Pre -bate?

Pre-bate refers to an arrangement in which a party pays a fee or premium to receive a tax benefit in advance, typically in the context of legal settlements or litigation finance. This concept is often associated with cases involving contingent fees, where a lawyer agrees to receive payment only if the case is won. By pre-bating, clients can secure funding for legal expenses while potentially reducing their tax liabilities. However, the specifics can vary based on jurisdiction and the nature of the agreement.