What tax should be paid on compensation for loss of membership rights paid to policy holders with Scottish Widows?

Compensation for loss of membership rights paid to policyholders by Scottish Widows is typically treated as a capital receipt, which means it may not be subject to income tax. However, individual circumstances can vary, and specific tax implications may depend on factors such as the nature of the compensation and the policyholder's overall tax situation. It's advisable for policyholders to consult with a tax professional or financial advisor to understand their specific obligations regarding this compensation.