Furnished Holiday Lets

Capital Allowances – Now! (before you lose the right)

If you own furnished holiday letting property in the UK or EU, you are almost certainly eligible to claim substantial tax rebates from HMRC for past years, as well as continuing tax reliefs in the future.

Any claim or losses created by the application of capital allowances can be currently offset 100% against any of your various sources of income.

However the treasury recently attempted to repeal the law but had to stop because they ran out of time due to the elections etc but it will be back on their “To Do List” ASAP.

When this happens then any claims resulting from our report can only be offset against your income derived from property rentals.

The Facts

There are specific criteria for who is eligible to claim capital allowances, and an estimated 500,000 property owners qualify. They are as follows:

  • The property must be a furnished holiday let in the UK or an EU country
  • The purchase price must have been at least £300,000
  • The owner must be a UK taxpayer
  • The rental income must be declared in your tax return
  • The property must be let out for more than 70 days each year and available for more than 140 days per year (verification is required in each case)
  • Individual lets should not exceed 31 days and your holiday home must not be let to the same person for more than 31 days in a year.
  • It is usually possible to claim allowances for capital expenditure going back many years, possibly right back to when the property was first acquired.
  • The tax law is complex and most accountants either do not understand it or are unaware of it.
  • It is a highly specialised area, requiring the additional services of a Quantity Surveyor to assess the claim.

The Criteria

  • The property can be anything from a villa to a studio apartment and must be located either in the UK or in any EU country
  • We typically find at least 25% of the purchase price of the property in claimable capital allowances
  • Where a villa is purchased for (say) £500,000, we are therefore likely to find you £125,000 allowances which can be offset against your corporation tax or income tax

Important Info

The past is not a reliable indicator of future performance. Investments, by their nature, are speculative and can be volatile and you should never invest more than you can safely afford to lose.

Information is for general indication only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions.

Appropriate independent advice should be obtained before making any such decision. My Money Mentor do not accept liability for any loss suffered by readers as a result of any such decision.