Compensation from Insurance company

Our house recently has water leakage which caused damage to our floor and other things, the insurance company will pay a lump-sum for us to repair the floor and compensate for other damaged stuffs. Please kindly advise if we need to pay any tax or report the lump-sum, thanks a lot.

Hi,
 

The property income manual advises that where repairs are covered by an insurance policy "you should allow as a deduction only the excess of the cost over the amount of the insurance recovery. Sometimes this is achieved in accounts by deducting the expense when it is incurred, and crediting the insurance recovery as a receipt when it is received".  This means that you would only claim expenses for the repair costs in excess of the insurance policy payment. See : Property Income Manual   . Thank you.