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  • Tax

    Holiday Let/Buy to Let Loss Relief

    Hi,

    I posted this in the Holiday Let forum but probably should have posted it here.

    Does anyone know if it is possible to offset losses from Holiday lets against profits from normal buy to lets?

    I have read that for holiday lets that qualify as "furnished holiday lets" losses can only be used against future profits for that business but in my situation it is unlikely that the property will be let for the 105 day qualifying threshold.

    If this should be in the Tax forum please let me know!

    Thanks
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    Hi Rob,

    You may find that this thread answers your question.

    I have also asked our tax partner, RITA, to comment here. Smile
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    Hi Rob

    It isn't clear whether this is a new FHL that simply doesn't qualify, or it has previously qualified and this year is a 'blip'. If the latter, you may be considering a period of grace election, especially if capital allowances have been claimed.

    Generally speaking, FHL losses are indeed ring-fenced against current and future FHL profits.

    If an FHL ceases to qualify, possibly after a prior period of grace election, it becomes a straightforward BTL property again, therefore losses will be able to be set against other property rental income in the relevant year. Watch capital allowances though, as there could be a balancing charge on reverting to a simple BTL.

    Also, don't forget a UK property business is separate from an overseas property business, whether FHL or not, so UK losses could not offset overseas profits, and vice versa.

    As always, much depends on individual circumstances. We would be happy to review your situation for you and are happy to offer an initial free chat about things if you would like to give us a call on 0800 122 3357.

    Regards

    RITA4Rent
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    RITA4Rent (Rental Income Tax Advisors)

    Specialists in Landlord Taxation

    Recommended tax advisors of the Residential Landlords Association

    Follow us on Twitter @Rita4Rent

    clients (at) rita4rent (dot) co (dot) uk

    http://www.rita4rent.co.uk