Furnished Holiday Let and Capital Allowance

dave_k_3

Hi All,

I hope someone can help me with a query I have about Furnished Holiday letting.

I'm trying to complete my tax return and am trying to figure out how much capital allowance I can claim for my holiday let and if I can offset this against my income from other property?

Basically the issue is this I bought a flat in the EEA and furnished it and let it out as a holiday let during 2010/11. I paid about £8000 to get it all furnished with beds, tables, fridge, cooker etc...
I think I can claim this back as a Capital Allowance but not sure if I can claim the entire amount (I think I can under Annual Investment Allowance) does anyone know for certain?

Also as I am making a loss I believe I can claim this against my other income, but should I roll it forward to next year? I'm worried that next year the property is not likely to be classed as a 'Furnished Holiday Let' and I believe there were changes in the budget meaning from 2011/12 you can not offset the loss of property abroad against a property here in the UK. So I am worried if I carry the loss forward to next year would it not apply to profits from UK property?

Any help is greatly appreciated.
Thanks in advance.

Dave

chrismac1

I am forwarding you a link all about this. The first question to ask is whether this was a qualifying holiday let during the 2010-11 tax year, otherwise the treatment in tax defaults to standard buy to let. Those items should be claimable providing the let itself was qualifying FHL, otherwise some would be 10% wear and tear which is probably not good news depending on the gross rents. I have a client who has completely mucked up on the tax side, despite the fact he first came to me over 2 years ago and I was flagging up all the likely changes to FHL every Budget, and sending e-mails of the actual changes. He was too slow doing up his place, only started renting in September, so will qualify FHL in 2011-12 but too late for tax relief against his PAYE.

dave_k_3

Hi chrismac1,

Thanks for that, it defintely qualifies as a FHL for 2010-11 tax year so I guess that £8000 should be allowable under capital allowance.

Now the only question is do I claim the entire loss against this years income or reduce this years tax to £0 and carry forward the remaining loss to next year.
If I carry it forward to next year I'm not sure if I will be able to claim the loss against any profit from other property here in the UK. Guessing it might be safer just to claim the loss now.

Thanks for the info.

dave_k_3

Actually I have another question, sorry.
After looking through my statements it looks like I paid for the furniture in the 2009-10 yax year but the property wasn't available (as in it wasn't completed) for renting until the 2010-11 tax year, does this mean I can't claim the furniture as a capital allowance?

Thanks
Dave