Bournecoast - Property Agents
Property AgentsProperty Agents

Tax Relief on Investment Properties

May 2004

Bournecoast have the solution for taking advantage of INLAND REVENUE TAX RELIEFS on investment properties. The requirements set by the Inland Revenue are that a letting is regarded as a furnished holiday letting and the property must meet the following qualifying tests (Sections 503-504 Income and Corporation Taxes Act 1988 as amended by later Finance Acts (FA)).

The property must a) be furnished; b) be made available for holiday letting to the public on a commercial basis for a minimum of 140 days during the year; c)be booked for a minimum of 70 days; d)NOT be occupied by the same person for more than 31 days (not necessarily consecutively) in any period of 7 months.

The benefits include entitlement to machinery and plant capital allowances on furniture, furnishings, etc in the let property, as well as on machinery and plant used outside the property (such as vans and tools). Also losses can be set against your total income and are not restricted to the rental business. Furnished holiday lettings are treated like trade for loss purposes and get the same loss reliefs as trades. If your losses exceed your income you can also choose to set your losses against your capital gains – see your professional adviser or tax office for further details.

The main benefit of treating your property investment as a furnished holiday property is that you may be able to take advantage of Capital gains tax reliefs such as business asset roll-over relief and taper relief. Des Simmons, Director of Bournecoast Ltd, said that “many out-of-town investors are now taking advantage of investing in properties in the area and using Bournecoast to let them out as furnished holiday accommodation, so they can use the property as their own holiday home for parts of the year and take advantage of the tax benefits”. With Bournecoast’s nearly 45 years of experience as a holiday letting agency it makes it very easy for such investors to be able to run furnished holiday accommodation without the hassle.

Steven Strongman, Bournecoast’s Property Sales Manager has noticed a considerable increase in Sales from these out-of-town investors and local property entrepreneurs who look for properties to buy with no lease restrictions on renting. Steven said “these buyers are looking for good quality properties, near the seafront, and they usually have their funds in place ready for a quick sale”.

Back to previous page

Contact Us

Contact us for more information about our properties for sale, to let or holidays.

Considering Buy-To-Let?

To find out more about the investment opportunities and tax benefits of buy-to-lets please click here.

Bournecoast Ltd
26 Southbourne Grove
Tel: (01202) 437 888
Fax: (01202) 437 889