Dilapidations damages could be income for tax purposes

In James Allan Thornton v The Commissioners for Her Majesty’s Revenue & Customs [2016] at the end of a lease, the premises were in disrepair. The landlord and tenant agreed a settlement by way of surrender premium, which was not attributed to any particular item. The parties recorded the payment as being ‘…in full and final settlement in relation to all issues associated with the lease’ In due course the landlord proceeded to repair the premises at a greater cost than the amount he receive. The landlord treated the money as a receipt of capital but HMRC viewed it that it continue reading

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