Alistair Darling’s ‘09 budget, delivered last week, includes plans to scrap the current Furnished Holiday Lettings (FHL) rules.This will come as a disappointment to UK holiday homes who are currently able to offset trading losses for their second home and benefit from Entrepeneur’s Relief — meaning they can pay business rate capital gains tax.
The new budget plans to remove these benefits from UK holiday home owners within the next two years.
However, these benefits can be maintained up until 2010 providing the property is available for commercial letting for a minimum of 140 days per year. For a more detailed explanation of the new FHL rules, please follow this link: http://www.hmrc.gov.uk/budget2009/furnished-hol-lets-1015.pdf
Ross Elder, managing director of holidaylettings.co.uk and a keynote speaker on maximising rental income from holiday properties, is less than impressed with the chancellor’s decision:
‘The withdrawal of government support for entrepreneurial second home owners could have long term damaging effects on UK tourism. At a time when the British public are increasingly seeking the value for money holidays they expect from renting a private holiday home, I cannot comprehend why the Chancellor should wish to endanger this income stream for holiday home owners and the economy as a whole.’