Wednesday, June 17, 2009

Tax breaks for those letting a furnished holiday home act before 31st July

From April 2010, those letting a furnished holiday property will see it being taxed in a different way.

Changes announced in the 2009 Budget mean that UK residents who let (or have previously let) a furnished holiday home in Europe need to act quickly to secure a short term tax break.

At the moment, those who let out a holiday home can offset any losses from the rental against other income. There are also more beneficial capital gains tax reliefs when selling such property. From April 2010, these tax advantages will be withdrawn.

However, until then, the current rules are being extended to apply to qualifying property in the European Economic Area (EEA). The particular qualifying conditions are extremely specific so you would need to speak with us to get more details.

Losses can be set against other income as far back as the 2006/7 tax year, but claims must be made before 31st July 2009. Individuals who may have sold such property in the tax years 2003/4 onwards should also undertake a review.

If you own such a property, or indeed if you previously owned such property, it would be wise to seek professional advice. In these difficult times there is real potential for tax savings through this change in legislation.

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