If you have furnished holiday lettings, you may be aware that the tax rules have changed from 6 April 2011. They are set to change again from April 2012, and this will have a major impact on clients deemed by HM Revenue and Customs to be ‘holiday home owners’.
The changes demand certain actions in order to continue to qualify for the income and capital taxes reliefs which have previously been available – and these reliefs themselves are also being squeezed. Losses are no longer available to be relieved against other income, and from next year, the period for qualification as a holiday let is increased. The rules get a little more sophisticated when there are multiple properties under ownership, or when there are a number of properties in one location, as in a complex, or when facilities may be shared, which adds complication.
Many holiday lets were acquired as tax efficient investments. The changes mean that this may no longer be the case.
To find out your precise position, telephone our Chartered Tax Advisor Paul Morris, who can explain the changes, the new rules, and what you may do to optimise the remaining reliefs available.