Holiday Home Tax Changes - More News

Earlier this year we reported that the then Chancellor Alistair Darling had shelved plans to implement the proposed increase in tax levied on Furnished Holiday Lettings (FHLs).(read full story) and judging by the feedback we received many of you were happy with this U-Turn.

The original plan was to scrap many of the tax advantages gained, by treating FHLs as a trade rather than just investment income. However as we forecast - changes are now back on the agenda. From April next year it is proposed that any FHL losses will only be carried forward against future FHL profits, not as is currently the case, set against any other sources of income.

The Government's aim is to ensure that tax rules for FHLs are fully compliant with EU law, and targeted at businesses that are run commercially for profit rather than for personal use. The proposals are likely to include increasing the number of days the qualifying property is available for rent to 210 a year (currently 140) and the number of days actually let to 105 (currently 70).

H.M.Treasury have produced a consultation paper you can view.

As usual we would like to hear your experiences so please e-mail us with your comments