London: +44 (0)20 7236 2601
St Albans: +44 (0)1727 869141
Rickmansworth: +44 (0) 1923 771010
Milton Keynes: +44 (0)1908 605552

Pre-Budget Report 2009 - furnished holiday lets

The Chancellor has confirmed that the furnished holiday lettings rules will be withdrawn from 2010/11.

This means that a furnished holiday let will be treated as any other property business. Some of the tax consequences of this will include the following issues:

  • Losses incurred before 6 April 2010 that have not been relieved at that date will be treated as losses from a property business. These will then only be available to set against future profits of the property business as will any future losses.
  • Capital allowances will not be available for expenditure incurred on or after 6 April 2010 on plant and machinery for use within the let property.
  • The business is no longer a trade for capital gains purposes which will result in the potential loss of some valuable capital gains reliefs.
  • From 6 April 2010 income from letting furnished holiday accommodation will not be relevant UK earnings for pension relief purposes. 

Liz Cuthbertson is a partner at Mercer & Hole. The views given in this blog are personal to the author, if you would like to discuss the contents of this post with Liz you can contact her at lizcuthbertson@mercerhole.co.uk or call 020 7353 1597.

 

 

Date: 9th December, 2009
Author: Liz Cuthbertson

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