The last Government announced last year that the special treatment for taxing Furnished Holiday Lettings would be abolished from April 2010 having extended it temporarily to properties in Europe. Today’s Budget documents have confirmed that that the special rules have survived for another year and that the Government will consult about changing the rules from April 2011.
It has always been a worry that those who buy holiday homes abroad through a company could be liable to a tax charge as a benefit in kind. In the 2007 Budget it was announced that the Government would introduce legislation to remove this possibility provided that there was no tax avoidance involved and all that the company did was hold the property.
The legislation has finally made the statute book in the Finance Act 2008 and provided the conditions are met the exemption is deemed to have always had effect. H M Revenue & Customs have indicated that if tax has been paid in the past on such a property then a claim for a refund can now be made.
Details of how to make a claim can be found here.
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