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Where Taxpayers and Advisers Meet

Tax Difference Short Term Tenancy versus Furnished Holiday Let

robertiac1
Posts:28
Joined:Mon Mar 23, 2015 7:40 pm
Tax Difference Short Term Tenancy versus Furnished Holiday Let

Postby robertiac1 » Thu Feb 23, 2017 2:21 pm

My daughter and her husband own their principal private residence in Oxford, and have no other property. From 1st April 2017 to 31st Dec 2017, they will be renting this furnished house to work colleagues, while they live and work in Sweden. This is at the instigation of her husband's firm which is a Swedish company and he will provide maternity cover in Sweden. My daughter has managed to find short term work in Sweden for this period.

They have notified HMRC of their intention using the non-resident landlords scheme on-line form. The letting contract from the lawyers arrived yesterday and this is a contract for a furnished holiday let, rather than a short term tenancy agreement. I would be grateful for advice on the tax implications of this with particular regard to CGT when they eventually sell their house.

I do hope someone can help.

Thank you.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Tax Difference Short Term Tenancy versus Furnished Holiday Let

Postby bd6759 » Thu Feb 23, 2017 6:56 pm

This is not a FHL, so I am surprised that the solicitor is suggesting it is. A FHL is normally a licence to occupy rather than a rental agreement. Given they are work colleagues nothing will fall on this, but a proper assured short term tenancy may offer more protection for both parties.

For tax puposes it is an ordinary let and will not be a FHL. Taxation wise there are differences, but none that will cause a diference to the amount of tax payable.

The period abroad for work purposes will be covered by the normal residence exemption, so there will be no CGT implications.

robertiac1
Posts:28
Joined:Mon Mar 23, 2015 7:40 pm

Re: Tax Difference Short Term Tenancy versus Furnished Holiday Let

Postby robertiac1 » Thu Feb 23, 2017 9:09 pm

Thank you very much indeed for your kind and helpful reply. I feel reassured.

Robert


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