The receipt of a sum in full and final settlement in relation to a lease of flats, which had become dilapidated, was capital as opposed to revenue in nature.
The appellant received rental income from 18 flats leased to Albyn Housing Society (‘Albyn’). The lease for the flats was a standard tenants repairing and insuring lease, whereby the tenant was responsible for the upkeep of the flats. However, they did not do so.
Although the flats were latterly vacant for at least a year (as they were unfit for habitation), Albyn continued to pay rent to the appellant whilst settlement negotiations were conducted to end Albyn’s liability under the lease, so that the appellant could recover the flats to prevent further disrepair.
A settlement was subsequently reached, and the appellant received £250,000 in July 2010. The receipt was not included in the appellant’s profit and
