Holiday Home Tax Rules Deferred27/04/2010

Good news for the Westcountry economy in that the tax rules on furnished holiday lets that were due to change in April 2010 have been deferred, albeit possibly only for a short period.

Following the election date announcement and opposition from both the Conservative and Liberal Democrat parties, the Government has agreed to defer the abolition of the rules until after the election... This was one of a number of more controversial measures dropped in order to get the Finance Bill through Parliament prior to the dissolution for the general election.

The beneficial tax reliefs reduce the tax burden of running furnished holiday let businesses, and enable owners to reinvest in their businesses, or pass the business on to their children tax efficiently. For the time being, capital allowance can be claimed, losses offset against other income and capital gains tax reliefs remain.

The issue now is one of uncertainty. Businesses need to make decisions based on the information they have to hand. Many furnished holiday let owners will be planning future capital investment, and the decision could depend on whether tax reliefs are available. Unfortunately until after the election we will be unsure whether furnished holiday let tax status will be protected, and owners will therefore need to keep an eye on the political situation when forming a view about whether to make the investment or not.