He commented, "There are many small businesses in the tourism industry today. To help them, I am reinstating the favourable tax rules for furnished holiday lettings, which our predecessors had planned to repeal".

The Current rules:

For property to count as a holiday letting you are probably aware it must be:

• In the European Economic Area
• Furnished
• Available to the public for at least 140 days a year
• Commercially let for at least 70 days a year
• Consist of short lets of not more than 30 days
• Only let for 210 days a year.

Furnished holiday lets are treated favourably for tax purposes, as currently you can:

• Set losses against other income in the same way as trading losses
• Claim capital allowances on the cost of furnishings, furniture and equipment
• Use Entrepreneurs relief to reduce effective CGT rate
• Hold over and rollover relief available
• FHL profits count as pensionable income.

Posted on Tue, June 22nd, 2010 at 4:21 pm