Good morning,
Where a tenant reimburses a landlord for damage they have done to a property - whether by deduction from their bond or direct payment - in respect of:
1) Items covered by the annual 10% Wear and Tear Allowance is claimed;
2) Items not covered by 1)
- which the landlord has yet to effect repairs/replacement - how are such amounts treated in the property income calculation?
The amounts are clearly not rent but items covered by the 10% WTA have already been relieved indirectly and the expense of repair/replacement has not (yet) been incurred.
Thanks for your comments in anticipation.
tladirect
Replies (4)
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It's income
It doesn't matter what you call it. The W&T is to compensate for damage (slow or instant) whether reimbursed or not. You've had the tax relief, now you have to pay the additional tax.
?
Why not? Surely you just have income (by reimbursement) and a corresponding expense for the repair?which means - where damage to non-W&T items is reimbursed - then this is not income, or is there some other way of treating this?
tladirect