Does the loss of rent payment by the insurance considered as an income for tax

Landlord Discussion Legal
1

Hi, we own a flat and there has been a water leak from the communal pipes to the flat. As a result, the wood floors and tiles were badly damaged and needed replacing. The tenant left the flat because of the damage. The building management’s insurance accepted the damage, the repairs took two months and we received a “loss of rent payment” from the insurers for two months of repair.

Does the payment we received from the insurance for the loss of rent counts as rent and has to be declared as income or can we exclude it from our income tax since that money was not paid to us by the tenant under the tenancy agreement? Many thanks.

2

Yes. (Extra characters get to 20)

3

still income My grant of 10k to help thru covid was taxed

4

You have to declare it as income. Good try.

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5

As ever, HMRC’s property income manual is your friend, or in this case, not your friend because it confirms the income is taxable…
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2110

6

Thank you all, we talked to an accountant, so it has to be put on our annual tax return.

7

Cath2, thank you for the valuable information, on the link it clearly states that “Insurance receipts in respect of loss of rents are taxable as income of the rental business”.
Kind regards

8

I say it is still friend as it will get anyone out of trouble if listened to. :wink:

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