HM Revenue & customs wants your opinion on proposals to change the special tax rules for furnished holiday homes which are let out commercially during the year.

Furnished Holiday Lettings Tax Reliefs

Furnished Holiday Lettings currently benefit from various tax reliefs, normally only available to people carrying on a trade, such as the ability to claim allowances on items such as furniture, kitchen fittings and household appliances used in the property.

Consultation on Furnished Holiday Lettings Tax Regime

A joint HM Treasury and HM Revenue & Customs (HMRC) consultation document contains the following proposals for change:

• increasing the minimum period that a qualifying property must actually be let out for in a year, from 10 weeks to 15 weeks;
• increasing the minimum period that a qualifying property must be available for letting in a year, from 20 weeks to 30 weeks;
• restricting the use of loss relief, so losses can only be set against future income of the same business and not, as now, against other income; and
• ensuring businesses with properties in the European Economic Area (EEA) are eligible to be treated as qualifying Furnished Holiday Lettings in the same way as businesses with properties in the UK.

Launching the consultation, Exchequer Secretary David Gauke said:

“Furnished holiday lettings play a vital role in any tourism industry, and the UK is no different.

“These proposals balance the need to make sure the rules are affordable, provide support to genuine commercial businesses, and meet our obligations under EU law.

“We really want to hear the views of agents who have an interest in these issues. The best legislation comes about through good consultation, so we would value any contributions, however large or small.”

The furnished holiday lettings consultation document is available at Furnished Holiday Lettings Consultation. The deadline for responses is 22 October 2010.

[For further information on Furnished Holiday Lettings generally, see the TaxationWeb article How to Get Property Tax Reliefs While You Still Can - Ed.]

Article Added Saturday, 07 August 2010 | 2880 Hits

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