The 2024 Spring Budget included the announcement that furnished holiday let (FHL) status will be abolished from April 2025. So what are the implications for FHL business owners who decide to continue their business – as well as those who want to sell up? FHL status – recap When a letting business qualifies as an FHL, it does not amount to a trade, but a number of tax breaks apply that do not apply to a general letting business. These are: business asset disposal relief (BADR) can apply on a disposal of the business; holdover and rollover relief can be claimed; finance costs can be deducted in ..read more

If you are living abroad, or you are a foreign national, and you own property in the UK in your personal name, you are still entitled to the UK personal tax allowance depending on your nationality and your country of residence. In 2024-25 this means that the first £12,570 of profits would be tax-free. If the property is jointly owned that would mean £25,140 between a couple if they are both entitled. Many nonresidents and ex-pats live in countries with a lower rate of taxation than the UK and some with no taxation at all on income from the UK. So this could be a very useful way to receive £12 ..read more

An associated company refers to a situation where two or more companies are connected in a way that allows one to influence or control the other. Here are the key points you need to know: Definition: Two or more companies are considered associated when the same person or group of persons can control both, either personally or through their interests in other corporate shareholders. Control Criteria: Direct Control: One company has control over the other. Mutual Control: Both companies are under the control of the same person or persons. Control Tests: Control can be determined based on fact ..read more

Finally, the main event. The moment we had all been waiting for. The Chancellor announced a cut to Capital Gains Tax on the sale of residential property. Property gains, the one type of gain that attracts a higher rate of tax relative to other assets, will be taxed at 24 percent, down from 28 percent for higher earners. Happy days surely? We have argued for years that this extra taxation has a perverse impact on the market and is actually holding back natural disposals of stock, locking up funds that might otherwise be reinvested. This must be a major victory for common sense. Perhaps. Perhaps ..read more

In his budget on 6th March, Chancellor Jeremy Hunt announced the end of the Furnished Holiday Letting Regime. The stated aim was to make more homes available to local people, particularly in holiday hotspots. So what does this mean for landlords with FHLs?  The abolition of the furnished holiday lettings (FHL) regime will mean that individuals operating FHL businesses will lose several key tax benefits. The implications will undoubtedly affect any landlord with a mortgage and in our opinion will see a shift to ownership in a limited company to avoid interest relief restriction under secti ..read more

The 2024 Spring Budget on 6th March held some major changes that will affect all landlords in general and owners of Furnished Holiday Lets in particular. We outline these changes below from the information currently available from the Government whilst we await the fine details and actual legislation which is yet to be released.  Stamp Duty Land Tax – Multiple Dwellings Relief Multiple Dwellings Relief (MDR) is a Stamp Duty Land Tax (SDLT) relief available to any purchaser buying 2 or more dwellings in a single transaction, or linked transactions, and allows the purchaser to calculate the ..read more

The Housing Secretary Michael Gove has announced that legislation is to be introduced in England this summer to require owners of short term lets to obtain planning permission from their local council prior to letting.  Similar rules already exist in Scotland and Northern Ireland with Wales set to introduce their own rules as well.  The move is an attempt to manage the housing crisis specifically where long-term rental availability is greatly reduced due to Airbnb-type lettings.  The legislation will enable councils to restrict the number of licenses for short term lets in a spe ..read more

As UK property accountants and tax advisers, we are regularly in discussions with our clients as to the correct treatment of expenditure relating to property letting income.  Expenditure will be classified as either Capital or Revenue. Revenue expenditure items are typically the day-to-day expenses, incurred in the normal course of running and maintaining a property to generate rental income. The expenses are normally recurring and can be deducted from the rental income to calculate the taxable profit. Examples of revenue expenditure will include:  Repairs and maintenance, letting ag ..read more

Stamp Duty Land tax (SDLT) remains in the spotlight for change to stimulate markets and the economy. Like most taxes, SDLT does have areas of complexity and many of these areas have been detailed in HMRC’s guidance.  The guidance details a number of scenarios and hopefully some clarity on interpreting the legislation.  The established HMRC guidance is provided as a Question-and-answer format, if you have any additional queries then this stamp duty FAQ should also provide help in addition: Q1-If I purchase a new main residence but also keep my current main residence, convert it to a b ..read more

When an individual sells their home, subject to rules on size and use, ordinarily any gain on sale is exempt from Capital Gains Tax (CGT).  The relief is provided through legislation under Section 222 TCGA 1992: Relief on disposal of private residence This section applies to a gain accruing to an individual so far as attributable to the disposal of, or of an interest in- A dwelling-house or part of a dwelling-house which is or has at any time in his period of ownership been, his only or main residence. In some cases, there can be uncertainty as to whether a particular residence is the ..read more