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Claiming Tax Relief on Overseas Property

29th June 2009

Do you own a property abroad?

UK residents can now make claims for tax relief’s associated with furnished holiday let property situated in other EEA countries. The EEA countries are the 27 EU countries plus Iceland, Liechtenstein and Norway.

What tax relief can be claimed?

There are a number of aspects you could consider claiming for, such as:

• Setting losses on the let property against other UK income;
• Capital allowances on equipment used in the property;
• Capital gains relief on selling the property;
• Entrepreneurs' relief for disposals made after 5 April 2008;
• Business asset taper relief for disposals made before 6 April 2008; and
• Business property relief for inheritance tax.

What about previous years?

These tax relief’s could apply for a number of past tax years as well, but in order to qualify, you will need to prove all of the following applied for the relevant year:

• The letting business was carried on commercially with a view to a profit;
• The property was available to let as furnished short-term holiday accommodation for at least 140 days per year;
• It was actually let for these short-term periods for at least 70 days per year; and
• Longer-term lettings, which exceed 31 consecutive days let to the same person, did not take up more than 155 days per year.

If this applies to you we can help you make a claim for tax relief which may be due, as part of your self assessment return. For more information on self assessments 08/09, please visit http://www.carringtonaccountancy.com/self-assessments

Its also important to note that this opportunity will cease as from the 2010/11 tax year when the government will be repealing the law which allows it, so as they say, make hay whilst the sun shines!

If you have any questions about the above please don’t hesitate to contact us on 0207 324 6020.

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