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Click here to e-mail your query or to arrange a free initial meeting to discuss Property Tax.
Eligibility The property must be
- available 140 days a year,
- actually let for 70 days and
- not occupied for more than 31 days by the same person. Longer periods of more than 31 days do not usually qualify and must not total more than 155 days during the year.
Income Tax
- HM Revenue and Customs will need to be told about the income and annual tax returns completed for the owners of the property.
- Losses sustained can be offset against other sources of income in the same and earlier tax years to potentially generate an Income Tax refund.
- Allowable expenses include Rates, Insurance, Light & Heat, Agents Commission, Advertising, Repairs and Cleaning together with Interest of Loans (as opposed to Capital).
- Capital Allowances are available at 40% in the first year and 25% in subsequent years.
- Profits will be taxed at 10%, 22% or 40%, depending on the level of other income.
Capital Gains Tax
- For Capital Gains Tax purposes, the property will be treated as a “Business Asset” and will therefore qualify for higher rates of “Taper Relief” meaning that Capital Gains Tax may only be payable on as little as 25% of the gain made.
- A period of occupation by the owner, accompanied by the appropriate Election, if necessary, may substantially reduce any capital gain.
Inheritance Tax
- Substantial involvement with the Holidaymakers may mean the property will qualify as “Business Property” and may therefore be exempt from Inheritance Tax.
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