Reclaiming interest on Furnished Holiday Let

Smiiithy

Good morning,

We are considering buying a lodge on a holiday park as a furnished holiday let.

I understand that a furnished holiday let is classed as a business ans we can deduct all of our expenses from our rental income before we are assessed for tax. Does anyone know if this includes the interest that we would be paying on the lodge itself?

Thanks in advance.

Kind regards,

Mike

00ec25

yes, but take heed of the restrictions. Have you read the facts?

https://www.gov.uk/government/publications/furnished-holiday-lettings-hs253-self-assessment-helpsheet/hs253-furnished-holiday-lettings-2019

"If your property is only used as a FHL and is closed for part of the year because there are no customers, you can deduct all the expenses, such as insurance and loan interest, for the whole year, provided you do not live in the property.

If you let part of the property as a FHL, or where you use the property privately for part of the year, you need to apportion your receipts and expenses on a reasonable basis."

https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim2054

"Interest and other finance costs on loans taken out for a property business which involves the letting of residential properties. Loans which are wholly for commercial properties, or for properties which are used for a furnished holiday letting business (see PIM4100) are not affected"

You need to learn all of the following (or pay an accountant to do your tax return):
https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4100