Profits from furnished holiday lettings are taxed as a trade for tax purposes and therefore have some tax advantages over other types of lettings. Such as:-
- Entitlement to capital allowances on furniture, furnishings, and white goods used in the letting property, as well as on plant and machinery used outside the property (such as vans and tools)
- Capital Gains Tax relief is available when the property is sold such as, business asset rollover relief, entrepreneurs’ relief, gift relief and relief for loans to traders.
- Profits count as earnings for pension purposes.
NB Sideways relief for losses against general income was abolished for 2011/12 onwards.