Final Dilaps payment

Our commercial tenant wants to be released from their lease early. They have not fulfilled any of their maintenance and repair obligations (a fully maintaining and repairing lease) over the last 8 years. We have served them with a final dilaps and estimated cost. Is this payment exempt from tax because it should have been spent over the last 8 years of lease? Also, where is there provision on my tax return for reporting all this?

Hi,
As per the information provided, we assume the payment referenced concerns the maintenance and repair obligations. If so, such payment would not be exempt from tax as it relates directly to the rental business and would be declared within the tax year the payment was received as income, with the subsequent repair costs declared within the usual way under allowable expenses if they meet the required criteria as revenue expenses as per the following guidance:
PIM2025 - Deductions: repairs: overview
Thank you.