Capital Allowances on Your Holiday Let Property?
Foreign Holiday Lettings (FHL’s)
Following the April 2009 Budget the tax advantages of Furnished Holiday Let (FHL) status have been extended to cover properites within the European Economic Area (EEA). For the first time, owners of European FHL's can claim capital allowances. There is only a limited time period to take advantage of this opportunity so owners must act swiftly. If your FHL is situated in the EEA and is available for commercial letting and you pay some form of tax in the UK, then you are just a few steps away from a potential tax rebate.
What are Capital Allowances?
As a European or UK Holiday property owner, you may be eligible to claim capital allowance against your rental property. Surprisingly the allowance is not commonly known of or advised by most accountants as it is a specialist area but it is a geniune allowance which is Her Majesty´s Revenue and Customs approved it could save you a small fortune!
Capital Allowance. this is the name given to the tax relief available on all UK FHL´S (Furnished Holiday Lets) properties in relation to items that are classified as being part of the intrinsic fabrication of the building.
There is no time bar on this exercise, as long as the prioperties are still used as a FHL it may be possible to claim tax relief for expenditure dating back to when the property was first aquired.
Qualifying Criteria
1) Do you or your company own a holiday rental property in Spain or any other EU country?
2) Did you pay over 160,000 Sterling or equivalent, this figure can include improvements and furniture packs, air con etc?
3) Is your property classified as a FHL? Do you pay some form of Tax in the UK?
4) Is it available to let for 140 days or 20 weeks per year? Is it rented for over 70 days or 10 weeks per year?
If you can answer Yes to these questions, then read on as you may be eligible to apply?
Example
Villa Purchase Price - GBP 500,000
Average Capital Allowance Identified - GBP 125,000
Client total benefit over two years to a uk 40% tax payer - GBP 21,875
How much does this cost ?
There is no initial payment to be made, once your property deeds have been checked usually 7 days, we will contact you to tell you whether or not you are eligble for a Capital Allowance Tax Rebate on your property and give you an approximate amount that you will receive. Only at this stage do you pay for the surveyor to travel from the UK to assess your property.
It sounds too good to be true. There must be some hidden costs?
There are absolutely no hidden costs. Should we fail to identify an additional £25,000 in unclaimed capital allowances then there are no
fees whatsoever. In short, there is absolutely no catch, if you benefit then so do we. You have paid this money out why not get some of it back.
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