The Inland Revenue detail the rules and qualifying conditions which determine whether a property is considered as Furnished Holiday Accommodation. Full details can be obtained from the Inland Revenue website. Providing these conditions are met, holiday letting in the UK is considered as a business and therefore attracts some benefits. As a business, the owner must also adhere to other legislation covering a variety of subjects such as Electricity at Work Act, Health and Safety etc. Holiday property investment should always be considered long term, but with sound income it represents a sound investment.
Gallinas Point for sale
Inland Revenue - qualifying tests - usually the tax year with the exception of first and final years.
- The availability condition is that, during the relevant period, the accommodation is available for commercial letting as holiday accommodation to the public generally for at least 140 days.
- The letting condition is that, during the relevant period, the accommodation is commercially let as holiday accommodation to members of the public for at least 70 days.
- The pattern of occupation condition is that, during the relevant period, not more than 155 days fall during periods of longer-term occupation.
Inland Revenue - treatment of income
- The loss can be offset against the general income apportioned by owner
- The losses not claimed against general income must be set first against any other profits of any other rental business in the same tax year; any balance remaining carried forward against first available profits.
Benefits of owning furnished holiday accommodation in the UK
- Allowances for furnishings inclusive of VAT, loan interest relief
- An effective CGT rate of 10% for gains less than £1 million or 18% if higher.
- Potentially exempt for the treatment of inheritance tax.
Legislative and advisory requirements - advice and services provided by letting agents
- Gas Landlord Certificate, Furniture complying to Furniture and Furnishings Fire and Safety Regulations
- Portable appliance testing and reporting. Periodic inspection of electrical systems.
- Health and Safety assessment and reporting. Fire Assessment