News: March 2013
Furnished holiday lets
A property within this special regime enjoys capital gains tax (CGT) and income tax advantages that normally are unavailable when you let a property.
It has always been frustrating that the valuable business property relief (BPR) for inheritance tax purposes does not automatically apply to furnished holiday lets, even where the property is within the special regime for CGT and income tax. Following a recent tax case the position is even worse than before, as in the case of Estate of N Pawson it was said that a holiday letting business is normally just like any other property letting business, which means that the property is mainly held as an investment and BPR is not available.
There are established ways of avoiding this real problem, involving the provision of plenty of extra services to the holidaymakers which they would not get as normal tenants of a property, and then listing them within the letting agreement.