ALL CHANGE ON THE HOLIDAY LET TAX FRONT
Saturday, April 16th, 2011Landlords of properties designated as furnished holiday lets need to prepare for major changes to the way these properties are taxed.
The first of these kicked in this month, but more changes are to follow in April 2012. Taking advice on tax affairs will be crucial to ensure you don’t fall foul of any changes.
Until April 6, where a furnished holiday let’s expenses exceeded its income, it was possible to obtain tax relief for this excess against other income. This was particularly useful for people letting out second homes, but the change affects any landlord with seasonal furnished holiday lets.
Now, any losses will only be available to carry forward to set against future profits.
However, another point to watch is that the present minimum requirements for letting the property are to change. Currently, the rules state that it must be let for 70 days a year and be available for letting for 140 days a year. These minimum requirements are set to increase with effect from April 6, 2012, to 105 and 210 days respectively. The property must be in the UK or another part of the European Economic Area.
For buy-to-let tax advice from the RLA Tax Centre click here.
