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Posted Sat, 27 Jul 2024 11:07:42 GMT by Sarah123
Hello I let out a leasehold flat for a few months until a structural problem with the building forced the end of the tenancy. The tenant moved out. My landlord (the head leaseholder between me and the freeholder) has provided compensation equal to the lost rental income the tenant had been paying, as they were in breach of the long term leasehold agreement I have with them. Of course I will report the 'normal' rent and expenses on my tax return for the relevant period until the tenant moved out. But, is the money I received from my landlord as compensation for not being able to let out the property also reportable / taxable as income? There was no letting possible during this period as there was a local council emergency prohibition in place ie noone was allowed to occupy the building. Many thanks
Posted Wed, 31 Jul 2024 13:56:09 GMT by HMRC Admin 18 Response
Hi,

Yes this is still classed as rent as it is seen as a payment in kind -

Property Income Manual

Thank you.

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