Furnished Holiday Lettings - further window of opportunity plus use of investment allowance

"The current government appears to believe that a supply of Furnished Holiday Lets is important for a thriving tourist industry and that the previous government's proposed changes would have damaged the industry.

There is therefore a further window of opportunity to review your furnished holiday let properties and consider improvements or disposal, particularly if your properties only just qualify under the existing rules. For the current year and next year, there is an annual investment allowance of £100,000 but this will reduce to £25,000 from 2012/13. That might lead one to consider an immediate programme of improvements on qualifying UK and EEA properties whilst there is certainty about the applicable tax rules.

HMRC no longer considers that holiday lets qualify for business property relief, in respect of Inheritance Tax, unless very significant additional services are provided. It would be helpful if the announced consultation also dealt with this issue so that the treatment of holiday lets is consistent throughout the taxes. " 

Helen Demuth: Tax director

Disclaimer

By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

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