Stop Press on Furnished Holiday Lets!
As you are probably aware, Labour planned to scrap the beneficial treatment of furnished holiday lets (“FHL”) from 6 April 2010. Under the existing rules, FHL were treated as a trade allowing losses to be set against other income and with other tax advantages. But this only applied to UK properties. EU rules meant that Labour were faced with extending the rules to any FHL in the EU area or scrapping the scheme altogether. Unsurprisingly, Labour planned to scrap the scheme.
It has just been reported that this measure has been dropped in order to scramble in some last minute legislation before Parliament breaks up. (also scrapped, the 10% rise in cider duty and the 50p broadband tax).
What does this mean? Well, for anyone with a furnished holiday let, it leaves them in limbo! Labour have said they would press ahead with the measures if re-elected and the Tories have “welcomed” the decision to drop the measure, suggesting they might not introduce it, allowing the beneficial treatment to continue in the UK and be extended into the EU.
Anyone with a FHL in the UK or EU must now ‘wait and see’ as any actions based on the anticipated changes may now be premature.Talk to Barnes Roffe today