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Ash
Ash, Solicitor
Category: Property Law
Satisfied Customers: 10916
Experience:  Solicitor with 5+ years experience
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We are landlords of a Industrial Unit the Tenants Lease came

Resolved Question:

We are landlords of a Industrial Unit the Tenants Lease came to an end and there were a lot of delapidations the tenant agreed a figure to pay us as damages for breach of covenants. Because the payment to us is for damages am I correct in thinking this is free of any tax please? Please quote a price for your answer
Regards ***** ********@******.***
Submitted: 2 years ago.
Category: Property Law
Expert:  Ash replied 2 years ago.
Hello Chris my name is ***** ***** I will help you.
In respect of commercial operating leases, the Financial Reporting Standard 12 (FRS 12) allows for a future dilapidations liability to be termed as an expense which can be included within the profit and loss account of the firm. It will then be excluded from the company’s tax computation until it is spent.
So yes, its tax free.
Can I clarify anything for you about this today please?
Alex
Ash and other Property Law Specialists are ready to help you
Customer: replied 2 years ago.
can these funds be paid into my private bank account
Expert:  Ash replied 2 years ago.
From the Landlord company yes. But not from the tenant to you personally.
Alex
Expert:  Ash replied 2 years ago.
Hi

I am just following up to see if there is anything else I can help with?

If this answers your question might I ask you to rate my answer before you go today please, the button should be at the bottom of the screen.

If you need more help please click reply.

Alex