Furnished Holiday Lets
Budget Announcement 22 April 2009.
Hidden away in the small print of this year's Budget annoncement on the 22 April is a startling change to the tax concessions offered to UK property owners who let property which qualifies under the Furnished Holiday Lets rule.
There are two major changes:
1. From the 6th April 2010 the Furnished Holiday Lets legislation is being withdrawn-the bad news!
2. Up to the 5th April 2010 it is now possible to include property you may own, and manage on a holiday lets basis, that is situated in other parts of the European Economic Area (EEA)-the good news!
Whether any of your clients are affected by either or both of these changes we should get together and see if there are changes we need to make to their tax planning in this area. We have listed below an indication of the issues we should discuss:
1. If your clients do have EEA property that will now qualify under the FHL rules it is possible to backdate claims, change tax returns, for 2006-2007 onards. This opens up the possibility of utilising or even creating tax losses that can be set off against your other earnings in those years.
2. If your clients current property holdings, in the UK or the EEA, have qualified as FHL for more than a year (to the date you sold, or intend to sell) we need to look at the loss of significant capital gains tax reliefs, particularly Entrepreneurs' Relief, on disposals after 5th April 2010.
3. I your clients have disposed of a property situated in the EEA in recent years, it may be possible to recalculate any capital gains tax paid using additional reliefs.
The above is intended to give you a "heads up" on the announced changes in relation to Furnished Holiday Lets.
Article Courtesy of Stephen Brownlee @ SDB Accountancy Services
