Taxation - Budget 2009

Following the recent Budget the Government have advised that with effect from 5th April 2010 they are set to repeal the tax legislation that applies to the commercial letting of furnished holiday let accomodation. From that date a furnished holiday letting business will no longer be treated as a "business" for any tax purposes.

The effect this will have is that individuals will no longer be able to claim capital allowances on expenditure such as furnishings, appliances,carpets, bathrooms and fitted kitchens. Any losses that are incurred will no longer be able to be offset against other earnings to obtain tax refunds. In addition a let property will no longer be treated as a business asset for capital gains tax purposes. The amount of tax charged on profits earned on disposal will rise from 10% to 18%.

After the legislation is repealed furnished holiday let accomodation will be treated no differently for tax purposes than any other type of longer term lettings. i.e. The income you achieve will be treated as if it were from an investment rather than from a business.

If you have a particular query or need to discuss your situation in detail please contact Tony Briscoe at www.dhcaccounting.co.uk on 01900 64464. Email address is advice@dhcaccounting.co.uk

The Financial Services Authority does not regulate taxation advice

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The Financial Services Authority does not regulate some aspects of Holiday Let Mortgages

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