Holiday home owners to lose tax benefits
Rules that allow owners who rent out holiday homes to set trading losses against their tax bills are to be dropped from April 2010.
Capital allowances and capital gains benefits on furnished holiday accommodation are to be scrapped as well at the same time.
However, the forthcoming changes, which were announced with the Budget, mean that people who own holiday homes in the EU will be able to claim the tax benefits that apply to owners of UK-based holiday homes, until, that is, the benefits are abolished next year.
HM Revenue and Customs said that the decision to include EU-based holiday homes within the current tax regime was made because of fears that the rules at the moment are discriminatory.
Homes count as holiday properties if they are furnished, are run as commercial businesses and are available for rental for a minimum of 140 days each year.
In order to qualify for the tax benefits, homes must be rented out for a minimum of 70 days annually.