UK Holiday Letting And Tax

This article is​ meant as​ a​ guide only. Advice should be taken from a​ qualified person.

Letting a​ fully furnished holiday home in​ the​ UK may mean the​ income made is​ treated differently than other rental income. Holiday lets are considered a​ business,​ where as​ other property letting income is​ classed as​ investment income.

The are some tax incentives for holiday lets,​ but your accommodation must comply with inland revenue rules,​ referred to​ as​ “QUALIFYING TESTS” which are:

* Based in​ the​ UK.

* Furnished rental accommodation.

* Available for holiday letting to​ the​ public for at​ least 140 days a​ year.

* Actually let as​ a​ holiday let for at​ least 70 days a​ year (and
these must be commercial lets,​ not at​ cheap rates to​ friends and

* Your occupier cannot stay for more than 31 days in​ any 7 month period.

* Lets must be at​ the​ full market value. This means letting your
cottage to​ family for £2 a​ week will not count.

And holiday lets must be (both):

* Short term lets of​ not more than 31 days.

* the​ only lets over a​ period of​ at​ least seven months.

Your income from you​ holiday let is​ subject to​ income tax,​ but you​ can off-set expenses for example:

* Repairs and maintenance.

* Decorating.

* Heating & lighting.

* Legal and letting agent's fees.

* Management fees and cleaning costs.

* Insurance.

* Mortgage interest payments.

If you​ make a​ loss,​ you​ can off-set this against your other income to​ reduce your tax bill. you​ can avoid paying capital gains tax on​ the​ sale of​ the​ property if​ you​ roll-over the​ income within 3 years to​ another holiday letting property.

There are other advantages,​ and as​ stated before,​ take professional advice before heading into holiday letting. There are many mortgages available for the​ buy to​ let market and spending some time with a​ well regarded mortgage advisor would be in​ your best interest
UK Holiday Letting And Tax UK Holiday Letting And Tax Reviewed by Henda Yesti on July 05, 2018 Rating: 5

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