The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for specific tax purposes. This begs the question, how can commercial property owners benefit from having a FHL?
Tax refunds and relief for Furnished Holiday Let owners
We can help furnished holiday property owners identify unclaimed capital allowances and receive tax refunds. Our service is guaranteed to be fully HMRC compliant to get you the maximum tax refund.
If you own a holiday home and pay tax on the rental income from this property in the UK then you could be missing out on thousands of pounds of tax allowances. Providing your holiday home(s) is available to be let for at least 210 days per year and is actually let for at least 105 days per year then you could have a claim for Embedded Capital Allowances.
As the name suggests these are items embedded in the property and forming part of its overall value when you bought it. It covers things such as radiators, heating systems, air conditioning, bathroom and toilet fittings, kitchens, security systems and much more.
Typically we would expect to find around 25% of the original purchase value of the property in previously unidentified Capital Allowances. £125K of allowances in a £500K property which translates as £50K in tax refund and/or reduction in future tax liability to a higher rate tax payer. So it’s an exercise well worth doing.
Claiming Embedded Capital Allowances is a risk-free exercise well worth considering when you own commercial property. You can estimate your total claim using our claims estimation tool or book a consultation with one of our claims specialists who can prepare an estimation on your behalf.
To find out more, check out some of our latest insights here.
Why HMA Tax?
The festive period is a good time for your clients to boost the income from holiday properties. If these qualify as furnished holiday lets, they attract favourable tax treatment, but how can you advise clients that fall just short of the qualifying conditions?
Good news for holiday home owners! In these days of punitive stamp duty for buy to let owners and changes to mortgage requirements for those looking to invest in property, there is a tax benefit for holiday home owners that many are unaware of and few have taken advantage of.
WHAT IS CLAIMABLE WITHIN A HOLIDAY RENTAL?
Whilst Embedded Capital Allowances are heavily ingrained within Holiday Lets, some plant and machinery items generate significant allowances when identified, valued, and claimed correctly. These include:
FREQUENTLY ASKED QUESTIONS
Probably not. It’s a highly specialised area of tax statute and requires very specific knowledge of this area as well as a specialist team that includes a chartered surveyor and a chartered tax specialist.
No, Capital Allowance claims do not effect the value of your property and don’t make any change to your Capital Gains position.
No, we submit all our claims to HMRC for approval and the refund comes from them. Our reports are very detailed and ensure HMRC have all the information they need when processing your claim.
Absolutely not. We look at claims for you on a results only basis, which means that if we do not find allowances that have been approved by HMRC, then we charge you nothing and any initial costs are covered by us. Our fee is completely linked to a successful outcome, so there is nothing to lose by investigating a potential claim.
Purchased for £650,000
£193,000
Allowances Identified