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Real Estate News Releases
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(EMAILWIRE.COM, April 30, 2009 ) UK - Thousands of UK holiday-home owners stand to lose a range of tax breaks under changes announced in last week’s Budget – but, in the short-term, they have been given the chance to apply retrospectively for a tax rebate previously reserved only for owners of UK-based holiday lets…
In a move that will affect around 100,000 people who let out their second homes for part of the year, the tax break, which was originally introduced in the 1980Â’s as a way of encouraging British tourism, could see them receiving a windfall of up to five yearsÂ’ worth of tax.
But, as of April 6th 2010, holiday properties will no longer be treated as business assets, meaning that landlords will no longer be able to write off trading losses from second homes against their tax bill.
This could result in additional tax bills of £4,000 a year. Capital allowances and capital gains benefits will also be scrapped.
Those owning homes within the EU but outside the UK will get the tax benefits currently enjoyed by owners of UK holiday homes until April 2010. But, come that month, these will also be scrapped.
Why is the tax break being withdrawn next year?
Whilst the tax break has been extended to those owning holiday homes inside the EU but outside the UK until next April because the EU feared it was unlawful to have the current discrepancy, it will then be withdrawn.
This is because HM Revenue & Customs had to choose between extending the tax break to all furnished holiday let owners at home and abroad - which could cost the Government £15 million, or abolishing it completely.
They chose the latter, which could mean that many holiday home owners will sell their properties rather than pay out the extra cash. This could be a bad sign for UK tourism, which is already struggling in the midst of the downturn.
Are you eligible for the windfall?
In order to be eligible for the current tax back allowance, properties must be furnished, being run as a commercial business and available for let for 140 days each year.
Eligible owners have until July 31st this year to apply to amend their tax returns for a rebate going back to the tax year 2006-07.
For claims going back to 2003-04, owners can write a letter to the tax office claiming that there has been an error or mistake on previous returns. This may or may not be accepted, depending on individual circumstances.
For more information on international money and the property market in general, please visit http://www.themovechannel.com/money/
-ENDS-
Notes to editors:
TheMoveChannel.com is a property website that was founded in 1999 as an online resource for buying, selling and learning about property. It now receives as many as 300,000 visits per month and advertises over 50,000 properties in nearly 90 countries, which are listed by over 500 partner organisations.
For further information, please contact:
Dan Johnson
Managing Director
www.themovechannel.com
0207 952 7650
TheMoveChannel.com
Dan Johnson
020 7952 7650
dj@themovechannel.com 
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