For years, the taxman has treated UK furnished holiday lets as a business, so any losses can be used to reduce the tax on other income. It turns out, however, that the current rules are not compliant with European law and therefore, as the small print in Alistair Darling's last Budget reveals, the "special tax treatment" will end on 5 April 2010.
This tax concession doesn't just relate to losses, says Myra Butterworth in The Daily Telegraph there are other tax breaks available to reduce inheritance and capital-gains tax, which will also be withdrawn.
That's bad news, but it does at least still leave the "door ajar" for maximising tax relief. If your holiday let loses money (accountants Baker Tilly estimates that owners lose around £10,000 on average on each property every tax year), get those maintenance jobs you've been putting off done soon.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Check your holiday let qualifies for the special tax relief first (see PIM4110 on HMRC's website) and don't confuse repair costs with improvements, which "count as capital expenditure and aren't deductible for income tax".
-
Four AI ETFs to buyIs now a good time to buy AI ETFs? We examine four AI ETFs that investors might want to add to their portfolio
-
Chase boosts easy-access interest rate - savers could earn 4.75%Chase is offering a boosted interest rate which is fixed for six months, on top of the standard variable rate
