Can I claim capital allowances on a holiday let?
With UK holiday destinations continuing to be a popular choice amongst UK residents, it is not surprising that the number of furnished holiday lets have also increased over the past few years.
But did you know that as the owner of a furnished holiday let whether that be an Airbnb or other form of holiday let, you are entitled to claim Capital Allowances? It is often overlooked as other residential rental properties such as buy to let properties do not qualify for such allowances therefore is often assumed this is the same for furnished holiday lets.
Capital Allowances reduce your taxable income, therefore lowering the amount of tax that you are required to pay. You could see between 20%-25% of the purchase price qualifying for Capital Allowances, providing a significant tax saving. Capital Allowances can also be claimed for past expenditure; therefore the property does not have to be a recently refurbished furnished holiday let.
Although Capital Allowances cannot be claimed for the cost of the property or land it is built on, any plant and machinery required for the day to day running of the business is included. In a Holiday Let this means there are a substantial number of eligible items such as kitchens, bathrooms, heating, lighting, furniture and much more!
What do I need to qualify?
The property must be available for letting as short-term holiday accommodation to the public for at least 210 days in the year.
The property must be let for at least 105 days a year.
Longer term occupation (over 31 days) must not exceed 155 days in total.
The owner must be a UK Tax Payer
The business must be commercial, meaning it is let on a commercial basis with the view to making a profit, lettings to friends or family at zero or nominal fees do not count as a commercial let.
With our expert knowledge in Capital Allowances and commitment to excellence we can help you to maximise your return on investment and profitability by easily identifying if you are eligible to make a Capital Allowances claim.
To see if you are eligible to claim, simply visit our ‘Do I Qualify’ page and our team will be in touch to start the claim process.
HMRC - Furnished holiday lettings: special tax treatment of furnished holiday lettings
Gov.UK - Furnished holiday lettings