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Jun
Furnished holiday lettings
The Budget 2009 contained announcements about significant
changes to the rules for furnished holiday lettings (FHL) but those
who are affected may have to act fast. The main announcements are
set out below:
- Extension of the furnished holiday lettings scheme to
properties in the European Economic Area (EEA) (previously it was
thought that the property had to be in the United Kingdom). This
change is being made due to the possible incompatibility of the
rules with European law.
- The removal of the scheme, and its advantageous tax treatments,
completely from April 2010. Unlike general property rental
businesses, FHL are treated as a trade for certain taxation
purposes, which is generally more preferential in terms of loss and
capital gains tax reliefs.
It may be worthwhile making claims for FHL treatment for
properties in the EEA including those for which tax returns have
already been submitted and where the property has actually been
disposed of in the last few years.
HMRC have indicated that, in the correct circumstances, late
claims and amendments will be accepted in relation to this matter.
The first deadline is 31 July 2009, although later deadlines may
apply in certain circumstances.
If you believe you may have or have had a property which
qualifies for FHL treatment, please do get in touch.
Internet link: HMRC
Budget guidance
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