Tax treatment - tenant compensation payment

Hello, I have a client who sold a rental property in 2022 and since then, the last tenant in the property has been threatening to take my client to court, claiming the property was unfit for purpose. My client has now entered into a settlement agreement with the tenant and made a small compensatory payment to this tenant. I was just wondering if this this payment is tax deductible on her self assessment? Whilst she no longer owns this property, she owns a couple of other properties so still declares property income and expenses, Many thanks

Hi,
We would refer you to BIM42951 which advises- Two main questions
The deduction of compensation or damages payments depends, broadly, on whether they were incurred:
wholly and exclusively for trade purposes, see BIM37000 onwards for general guidance and BIM42955 on compensation/damages payments, and
on revenue account, see BIM35000 onwards for the capital/revenue distinction and BIM42960 on compensation/damages payments. 
Thank you.