Have a holiday home?

For people with holiday homes there are new rules on tax from rental income and expenses, however if you let out a furnished holiday home in the UK or elsewhere in the European Economic Area (EEA), your rental income may be treated differently for tax purposes from other rental income.

The Government's new Finance Bill 2011 states;

- The minimum period a property must be available for letting to the public is to be increased from 140 days to 210 days over a year.

- The minimum period a qualifying property is actually let to the public in the relevant period is increasing from 70 days to 105 days a year. (Meaning owners of furnished holiday lets will effectively  have to find more than another month's worth of holiday lets to qualify as a FHL furnished holiday let).

Tax breaks for properties that qualify as a FHL include capital allowances (for example furnishings and furniture and equipment such as fridges and washing machines) and also tax breaks concerning any loss made on rental income and if you decide to sell or dispose of your property.

For holiday homes that no longer qualify under the new rules, rental income will instead be treated in the same way as that of residential property lettings.