Is a loss of rent insurance payout treated as taxable income

Is a loss of rent insurance payout treated as taxable income

18:41 PM, 8th May 2014, About 10 years ago 7

Text Size

We recently received a payment for loss of rent at a property after a fire made it uninhabitable.

Should we declare it on the accounts as income? Is a loss of rent insurance payout treated as taxable income

Thanks

Mike


Share This Article


Comments

Mark Weedon

18:45 PM, 8th May 2014, About 10 years ago

Hi Mike

I'm not an accountant but because it's replacing the income you would otherwise have received I would say yes.

Bill Marriott

19:11 PM, 8th May 2014, About 10 years ago

I had a similar claim and I checked this with my accountant. It needs to be declared.

Jonathan Clarke

19:54 PM, 8th May 2014, About 10 years ago

Yes

Sally T

22:22 PM, 8th May 2014, About 10 years ago

If you had to pay to rehouse your tenant you would put that in as a loss, so having a payment to cover income should surely go in as a gain.

Michael Barnes

23:09 PM, 8th May 2014, About 10 years ago

Yes.

See PIM1056

Jeremy Smith

1:10 AM, 9th May 2014, About 10 years ago

Yes, of course, but a good question.
You deduct the insurance premiums as a loss, so the payout is a gain.

But are ALL of the "major renovations" required after the fire also deductable ?
- I would think so, but you might be improving it over and above the condition before the fire - it will be "as new" perhaps, not just decoration.

I will be interested in other peoples views.

Michael Barnes

11:31 AM, 9th May 2014, About 10 years ago

Reply to the comment left by "Jeremy Smith" at "09/05/2014 - 01:10":

Repairs are allowable if
a) it is like for like.
b) no added features/capabilities.

but the following are allowed
c) using modern materials with similar properties
d) minor improvements in capability or performance from use of modern materials.

see PIM2020

Leave Comments

In order to post comments you will need to Sign In or Sign Up for a FREE Membership

or

Don't have an account? Sign Up

Landlord Tax Planning Book Now