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The Chancellor has confirmed that the furnished holiday lettings rules will be withdrawn from 2010/11.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.
Comments (1) Read through and enter the discussion with the form at the end
i would like some information on behalf of a friend who lets out his static caravans. Both caravans were purchased after april 2009. on a previous caravan purchased in march 2007 my friend was able to claim a 50% loss against his other paye income. Will he still be able to claim these 50% losses on his new vans because these vans were purchased in 2009 tax year ? as it states that these losses will cease on or after the 2010/2011 tax year.
I would be grateful if anyone could help me on this matter.
regards jon waldron