UK holiday let tax break ‘overrated’

A UK tax break on holiday lets which has been extended to cover second homes in the EU will not be of use to expats, an international accounting firm has said.

The UK government has extended a tax break on furnished holiday lets that originally only applied inside the UK, to second homes across the EU.

The measure applies retrospectively to 2003 but according to the associate director of Siddalls Marjorie Mansfield, few will actually benefit.

To qualify taxpayers must apply by July 31, but their properties must also have been let out inline with UK criteria.

To be eligible for the allowance, properties must be let for ten weeks a year and available to let for 140 days.

People still living in the UK will nonetheless still be liable to pay tax to France on rental income from holiday lets.

The UK government plans to close the tax break completely on April 6, 2010.

Mrs Mansfield said: “It would apply to very few people

“If people are living in France then that is the end of the story.

“If they’re living in the UK they would have had to comply with all the requirements over the past few years.”

Property owners have until July 31 2009 to apply to amend their tax returns for the tax year 2006-07.

For claims going back to 2003-04, they must contact HMRC in writing.