Holiday Home Taxation

Capital Allowances legislation allows luxury lodges, meeting certain technical and rental conditions, to now qualify as Furnished Holiday Lets (FHL) and therefore commercial property under HMRC rules.

Minimum Letting Criteria

  1. Must be available for letting for at least 210 days each year
  2. Must achieve actual occupation of at least 105 days each year ignoring longer lets of over 31 days
  3. Longer lets must not comprise of over 155 days when added together

As part of our extensive Gold and Platinum Investment Packages, we also offer a Capital Allowances report service produced by an independent specialist company, Millbank Capital Limited. This will value your lodge for capital allowance tax relief purposes and up to 90% of the purchase price may qualify. The cost for this service is currently 3% of the cost of your lodge.

Purchase price £100,000
Level of qualifying allowances £90,000
Benefit for 40% tax payers £36,000
Benefit for 20% tax payers £18,000

For most owners, a successful capital allowances claim should mean that, during the guaranteed income period, all returns would effectively become not just net of costs but net of taxation. After the guarantee period ends, as long as your lodge continues to meet the minimum Furnished Holiday Lets criteria Capital Allowances will continue to reduce the tax payable on the returns from letting until tax relief has been enjoyed on the entire Capital Allowances value, or perhaps you decide it is now time to enjoy the luxury lodge for yourself!