Tax implications of holiday lets?

shamac

We are going to let out our house as a holiday let. I understand we might be able to claim the mortgage interest etc against tax. Does this mean just the tax we would have paid on the income from the house (which will be nil anyway as it will just pay for itself and not make a profit) or can we claim it another way-my husband is self-employed-could we offset it against his tax in any way??

fengirl_2

Income from letting is unearned income so the losses cannot be offset against other income.
You would declare the actual income received less outgoings relating to the period of the let, including the mortgage interest for the period. If the expenditure is more than the income, you pay no tax and can only carry the loss forward to set against any profit the follwoing year.

Pennywise

I have to disagree - holiday letting losses are indeed offsettable against other income such as self employment as it is treated as a business loss -

The HMRC booklet on land and property has some good information on holiday lettings, allowable expenses and treatment of losses:-

http://www.hmrc.gov.uk/worksheets/sa105notes.pdf

Your main issue is to make sure that it is let out for sufficient days for it to qualify as a holiday let.