UK Holiday Letting And Tax
- Date: 2006-12-09 - Word Count: 306
Share This!
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
family).
* 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
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
family).
* 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
Related Tags: holiday, travel, rental, advice, tax, self, catering, cottage, lettings, cornwall
Written by Jamie Hibbert the webmaster of Holiday cottage Cornwall A successful online holiday accommodation resource covering Devon and Cornwall.
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- The No. 1 Rule For Projecting Confidence - Speak With Authority
One of the most important characteristics a person can project in a business setting - or any situat - After the Autumn Checkout European Debt Crisis and U.S. Brewing Rebound
In the commotion caused by the Fed on interest rates come to an end, the "disastrous" for the euro a - Advantages Of Arcade Game Rentals
There are many different advantages to arcade game rentals. Most people need something to release th - A General Primer on Truck Cargo Nets
In modern highways it is quite rare to see truck cargo nets in action, this is because they are usua - The United States Will Burst More Severe Financial Crisis
Not long ago, suddenly announced that the central bank to raise interest rates, the interest rate hi - Niche Marketing Profits - 3 Easy Steps to Finding a Profitable Niche Market Income in 10 Minutes
Like most beginners I was having a very difficult time trying to find a niche market to earn extra m - The Importance of Hospitality Management Consulting Firms Toronto
Businesses and the managers that help guide any business are in a constant state of improvement and - New Keynesian Theory Label
2010 winner of the Nobel Prize in Economics three theories have been labeled as "New Keynesian" labe - Federal Reserve Pouring Money QE2 Unpredictable Fortune
U.S. economist Milton Friedman proposed a "throw the cash from a helicopter" view, while the practic - Fiscal Consolidation Should no Longer Delay
British Chancellor of the Exchequer George Osborne today announced fiscal consolidation policy, shoc
Most viewed articles in this category:
- Common Financial Problems to Avoid
One must first change their habits and not procrastinate. American Consultants Inc at offers key fi - How a Bad Hire Can Hurt Your Business
What's worse - hiring the wrong person or not hiring anyone at all? Companies can become almost des - Joel Comm Is Dr. Adsense
What is Adsense? If you are new to making money online and net marketing, you may not know what Ads - 5 Steps For A Dynamic Wealth System Online
Recipe: Opportunity + knowledge + Dynamic Wealth System + Your Action = Massive Success!!! Step 1 - How To Stop Foreclosure
Losing your house to a foreclosure can be very scary. There are times when circumstances are ou - How to Always Pitch A Strike
As business owners, we are always working on new ways to convince people to become customers, client - Membrane Diffuser Solutions for Wastewater Treatment Systems
In the aeration basin of a typical wastewater treatment plant there are both organic and inorganic m - Another Year Hating Your Job or Loving Life?
Copyright © 2007 Mary Foley I've come to the conclusion that to be successful - really successf - Dyestuff Industry In India And China
World demand for dyes and organic pigments to touch $10.6 billion in 2008According to a study on dye - Cma-cgm Case : the Series of Lawsuits Continues in Syria, Lebanon, Egypt, France, England and the United States
Damietta company case : The series of lawsuits continues in Syria, Lebanon, Egypt, France, England a