December 14th, 2019

The Jonathan Ford & Co Advent Calendar – Day 14

 

Over the course of the festive season we’ll be bringing you an advent calendar’s worth of tax and financial tips.  Some of them might even be a little Christmassy!  A glimmer of relief for downtrodden residential landlords lies in wait behind door number 14…

Convert your buy to let to a furnished holiday let

Successive governments seem to have a big problem with residential landlords if the raft of tax measures introduced over the past three years is anything to go by.

We’ve seen higher capital gains tax (CGT) rates on residential properties than other assets, the shortening of CGT deadlines, an increase in stamp duty, the removal of higher rate tax relief on finance costs and the reduction or effective abolition of valuable reliefs such as principal private residence and lettings relief.

The removal of higher rate tax relief on finance costs in particular is the most horrendous piece of tax legislation I have ever seen.

There is, however, a strategy that can be employed to avoid some of these negative impacts and that is to rent your property as a furnished holiday let (FHL) rather than a long term let.

The finance cost restriction doesn’t apply to FHLs and capital allowances can be claimed on fixtures, fittings and white goods.

FHLs also qualify for the lower rates of CGT.  In the right circumstances, FHLs may qualify for CGT Entrepreneurs’ Relief and even Business Property Relief for inheritance tax.

To qualify as an FHL:

With the rise of Airbnb, offering short lets has become much easier.  It’s therefore well worth considering if the location of your property would be conducive to those requiring short lets, such as holidaymakers, sports fans or business travellers.

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Capital Gains Tax Inheritance Tax Landlords Tax Advice

by
Director

John manages a wide portfolio of owner managed businesses and oversees the smooth operation of the firm’s payroll department.

After obtaining his degree in mathematics from the University of Liverpool, John joined Jonathan Ford & Co in 2004 and qualified as a chartered accountant four years later. John likes to keep abreast of developments in tax and accounting and is responsible for the mentoring of junior staff.

Outside of work, John enjoys keeping fit and is a Liverpool FC season ticket holder.

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