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Claiming tax relief on foreign holiday let property for 2009-10 only
Monday, 24th August 2009

UK residents can now make claims for tax reliefs associated with furnished holiday let property situated in other EEA countries. The EEA countries are the 27 EU countries plus Iceland, Liechtenstein and Norway.

Don't forget that for 2009/2010 only it is possible to claim that your foreign holiday let property situated in the EU qualifies as a trade. From 2010, this law will be repealed. By claiming that the letting of the property qualifies as a trade, a number of tax reliefs are available including:

• Setting losses on the let property against other UK income;
• Capital allowances on equipment used in the property;
• Capital gains relief on selling the property;
• Entrepreneurs' relief for disposals made after 5 April 2008;
• Business asset taper relief for disposals made before 6 April 2008; and
• Business property relief for inheritance tax

These tax reliefs could apply for a number of PAST tax years, but to qualify you need to prove all of the following applied for the relevant year:

• The letting business was carried on commercially with a view to a profit;
• The property was available to let as furnished short-term holiday accommodation for at least 140 days per year;
• It was actually let for short-term periods for at least 70 days per year
and;
• Longer-term lettings, which exceed 31 consecutive days let to the same person, did not take up more than 155 days per year

If this applies to you please contact a member of the tax team to ensure that the appropriate claim for tax relief is made.


Derby
Clare Beachell
clare.beachell@smithcooper.co.uk


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