Claiming Tax Relief on Overseas Property
In our Budget weblog we mentioned that UK residents could now make claims for tax reliefs associated with furnished holiday-let property situated in other EEA countries. The EEA countries are the 27 EU countries plus Iceland, Liechtenstein and Norway.
The tax reliefs that could be claimed include:
- - 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.
These tax reliefs could apply for a number of PAST tax years, but to qualify you 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 a claim may be made for tax relief, which may be due.