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RICS Black Book Guidance Note

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Services for Furnished Holiday Lets

If you earn income from letting a furnished holiday (FHL) property within the European Economic Area you may be able to benefit from tax relief by claiming capital allowances.

Up to 35% of the purchase price can qualify for allowances (depending on the specifics of the property).

This means that on a say, £300,000 property purchase, up to £105,000 can be offset against taxable income (that is, written-off for tax). If you pay tax at the 40% higher rate this could save tax of more than £40,000.

What Qualifies for Capital Allowances?

Capital allowances are available for the proportion of the property purchase price that relates to qualifying 'plant' and 'machinery' (as defined for tax purposes).

These include pools, heating, electrics, plumbing, fittings and many other assets.

How are Capital Allowances Used?

The allowances are used to reduce the tax paid on your rental income.

Depending on the timing, any excess tax relief can be used to shelter any of your other income or carried forward to future years (although for money spent after April 2011 losses may only be offset against your same FHL business).

Does my Property Qualify?

Capital allowances are claimed in UK tax returns. To be eligible to claim, the property must be let on a commercial basis and:-

  • Available to be let for at least 140 days a year (210 days from April 2012);
  • Actually let for a minimum of 70 days a year (105 days from April 2012, see Note below);
  • Not let to the same person for periods of more than 31 days, for more than 155 days in a year.

Note: From April 2012, a "period of grace" will exist to allow taxpayers that don't continue to meet the "actually let" requirement for the next two years to elect to continue to qualify throughout that period.

How to Apply

If you meet the above criteria you may be able to claim capital allowances for your furnished holiday let property.

Just Send us a Message using the form opposite, including the following information in your message:-

  • Property location;
  • Date of purchase;
  • Purchase price;
  • Brief property description;
  • Website used to advertise property;
  • Rate of tax paid on rental income (20%, 40% or 50%).

We'll come back to you with an initial assessment of the potential savings.

Send us a Message...

Give us a Call...

London and the East Midlands:-

Martin Wilson

Telephone: 0116 241 4148

Mobile: 07799 473 562

West Midlands, South West & Wales:-

Adam Garrad

Telephone: 0121 354 1338

Mobile: 07799 473 561

The East and South East:-

Steven Bone

Telephone: 01353 675 224

Mobile: 07880 711 368

The North, Scotland and Ireland:-

Steven Burchill

Telephone: 01506 811 561

Mobile: 07799 473 566

Our Latest Publications

Our Latest Publications

Capital Allowances: Transactions and Planning 2014/15

RICS Black Book Guidance Note

Other Books and Press Articles
Publications from The Capital Allowances Partnership Limited

Our Publications

Books

Press Articles