Furnished Holiday Letting Campaign

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March 2010 Update Presentation

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Furnished Holiday Letting Campaign

  1. 1. FURNISHED HOLIDAY LETTING UPDATE WHERE ARE WE NOW? MARCH 2010 www.winterrule.co.uk
  2. 2. <ul><li>WHAT’S ALL THE FUSS ABOUT? </li></ul><ul><li>Distinction between business and trade </li></ul><ul><li>What is the definition of a trade? </li></ul><ul><li>Not well defined by tax legislation </li></ul><ul><li>Reliant on case law – Gittos v Barclay (1982) </li></ul>
  3. 3. <ul><li>FURNISHED HOLIDAY LETTING RULES </li></ul><ul><li>Introduced by Finance Act 1984 </li></ul><ul><li>Special provisions dealing with </li></ul><ul><li>- losses </li></ul><ul><li>- capital allowances </li></ul><ul><li>- apportionment of income </li></ul><ul><li>- capital gains tax </li></ul>
  4. 4. <ul><li>THE SPECIAL RULES </li></ul><ul><li>Available for letting for 20 weeks </li></ul><ul><li>Let for 10 weeks </li></ul><ul><li>Commercially let </li></ul><ul><li>Must not be continuously let for > 31 days in a 7 month period </li></ul><ul><li>Applies to UK and other EEA properties </li></ul>
  5. 5. <ul><li>THE PROCESS OF CHANGE SO FAR </li></ul><ul><li>Budget – 22 April 2009 </li></ul><ul><li>“ Consultation” with interested parties </li></ul><ul><li>Pre Budget Report – 9 December 2009 </li></ul><ul><li>Formal consultation (closed 28 February 2010) </li></ul><ul><li>Finance bill (still to come) </li></ul>
  6. 6. <ul><li>IMPLEMENTATION DATE – 6 APRIL 2010 </li></ul><ul><li>No legislation yet </li></ul><ul><li>Will not be legally enforceable on 6 April 2010 </li></ul><ul><li>Two finance bills this year – before and after the election </li></ul><ul><li>Electoral uncertainty </li></ul>
  7. 7. <ul><li>LAST CHANCE NOW? </li></ul><ul><li>Hold-over relief </li></ul><ul><li>Roll-over relief </li></ul><ul><li>Allocation between spouses (VAT?) </li></ul><ul><li>Current year losses </li></ul>
  8. 8. <ul><li>ENTREPRENEURS’ RELIEF ENTITLEMENT </li></ul><ul><li>Deemed cessation on 5 April 2010 </li></ul><ul><li>Entrepreneurs’ relief available on sale until 5 April 2013 </li></ul><ul><li>Therefore – no immediate problem on a sale </li></ul>
  9. 9. <ul><li>ONGOING CONSULTATION ISSUES </li></ul><ul><li>Meaning of dwelling for capital allowances purposes </li></ul><ul><li>Definition of premises for trading purposes </li></ul>
  10. 10. <ul><li>MEANING OF DWELLING </li></ul><ul><li>No capital allowances on expenditure in a dwelling </li></ul><ul><li>Definition of a dwelling? </li></ul><ul><li>Extent of definition of a dwelling - garden? </li></ul><ul><li>Impact of occupancy restrictions </li></ul><ul><li>We’ll get back to you. </li></ul>
  11. 11. <ul><li>PREMISES </li></ul><ul><li>Landlord resident on the premises? </li></ul><ul><li>Legal issue as to type of income </li></ul><ul><li>Hotel – landlord resident </li></ul><ul><li>Implications for other land and property income </li></ul><ul><li>We’ll get back to you. </li></ul>
  12. 12. <ul><li>FARMERS/HOTELS </li></ul><ul><li>Entrepreneurs’ relief restrictions </li></ul><ul><li>Investments? </li></ul><ul><li>A lot of problems BUT </li></ul><ul><li>How significant? </li></ul>
  13. 13. <ul><li>WHERE’S THE MISCHIEF? </li></ul><ul><li>EU discrimination </li></ul><ul><li>10%/18% vs 40%/50% tax rates </li></ul><ul><li>Capital allowances new regime - AIA </li></ul><ul><li>Poor compliance/enforcement </li></ul>
  14. 14. <ul><li>LOBBYING BY TOURISM BODIES </li></ul><ul><li>Maintaining status quo </li></ul><ul><li>Increasing week/day limits in legislation </li></ul><ul><li>Simplistic approach </li></ul><ul><li>Problem for some areas e.g. Cornwall </li></ul>
  15. 15. <ul><li>CONSERVATIVE POLICY? </li></ul><ul><li>Action promised </li></ul><ul><li>Fiscally neutral </li></ul><ul><li>Increase in week/day limits </li></ul><ul><li>Interest restriction </li></ul><ul><li>AIA? </li></ul><ul><li>What will H M Treasury think? </li></ul>
  16. 16. ANY RELEVANT BUDGET ANNOUNCEMENTS?
  17. 17. <ul><li>WHERE ARE WE NOW? </li></ul><ul><li>Spend money pre 6 April 2010 </li></ul><ul><li>Period of uncertainty after 5 April 2010 </li></ul><ul><li>Avoid discussions until after Royal Assent of Finance Act (No.2) </li></ul><ul><li>Buying opportunity? </li></ul>
  18. 18. QUESTION & ANSWER SESSION
  19. 19. LOWIN HOUSE TREGOLLS ROAD TRURO CORNWALL TR1 2NA TELEPHONE: 01872 276477 EMAIL: [email_address]

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