The Budget 2009 contained announcements
about significant changes to the rules for
furnished holiday lettings (FHL) but those
who are affected may have to act fast. The
main announcements are set out below:
- Extension of the furnished holiday
lettings scheme to properties in the
European Economic Area (EEA) (previously
it was thought that the property had to
be in the United Kingdom). This change
is being made due to the possible
incompatibility of the rules with
European law.
- The removal of the scheme, and its
advantageous tax treatments, completely
from April 2010. Unlike general property
rental businesses, FHL are treated as a
trade for certain taxation purposes,
which is generally more preferential in
terms of loss and capital gains tax
reliefs.
It may be worthwhile making claims for
FHL treatment for properties in the EEA
including those for which tax returns have
already been submitted and where the
property has actually been disposed of in
the last few years.
HMRC have indicated that, in the
correct circumstances, late claims and
amendments will be accepted in relation to
this matter. The first deadline is 31 July
2009, although later deadlines may apply
in certain circumstances.
If you believe you may have or have had
a property which qualifies for FHL
treatment, please do get in touch.
Internet link:
HMRC Budget guidance |
