Cornwall, and we expect many holiday locations, are seeing an increase in landlords switching from domestic letting to holiday lets. Aside from the increased rents they can obtain, should they be successful in making this transition, there are tax as well as commercial advantages.
It all comes down to occupancy.
What are the tax advantages?
There are a number of tax incentives if you own and let a furnished holiday lets property (FHL). They include:
- Claiming Capital Gains Tax reliefs for traders (Business Asset Rollover Relief, Business Asset Disposal Relief, relief for gifts of business assets and relief for loans to traders),
- Entitlement to claim capital allowance deductions for items such as furniture, equipment and fixtures, and
- Profits earned from holiday...