Early termination of a finance lease

We have on our books an asset that the Council has leased (as a tenant)for 99 years at peppercorn rent. We do not have much further use for this asset and the landlord has offered us a flat amount to terminate the lease early. This amount is just slightly higher than the value at which we are holding it in our non-current assets. Would the termination fee be recognised as revenue, or would we treat it as a capital receipt on "disposal of an asset"?

Thanks
  • If you've previously recognised this as an asset on your balance sheet then I would recognise the income as a capital receipt , being a sum received in respect of the disposal of an interest in a capital asset. If under £10k though it will not be a capital receipt.