Tax Benefits

Letting your property as a furnished holiday let (FHL) over an Assured Shorthold Tenancy (AST) not only has multiple tax advantages but also, reduces the risk of financial loss that often comes with renting through the standard rental market.  Losses such as eviction notices, void periods, admin fees and unrecoverable property damage costs.  

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It is important that property owners understand the full criteria of becoming a FHL as rental guarantee is not provided. Property owners should consult with their financial advisor/mortgage provider. To get started on this road of discovery, below is some information on Tax Advantages of Short Term Lets FHL.

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You could qualify for Capital Gains Tax Relief - This means you qualify for Business Asset Rollover Relief, Entrepreneurs’ Relief, relief for gifts of business assets and relief for loans to traders.

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If you decide to sell your property to tap into a rise in market value, you won’t incur a huge tax bill if you have been letting your property on a short-term basis - this does not apply if your buy to let was rented as an AST. Additionally, there are further tax advantages such as plant and machinery capital allowances for items such as furniture, equipment and fixtures and profits can count as earnings for pension purposes. 

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To read more about the tax advantages that come with FHL, take a look at Government Webpage.