Are you eligible?

Overseas mortgage adviser, Conti, is reminding Britons who rent out second homes in Europe that they could now be eligible for a tax rebate from HM Revenue & Customs...

In last month's budget, Chancellor of the Exchequer Alistair Darling included a clause that allows owners of holiday lets in Europe to apply retrospectively for tax rebates covering the past five years.

The Change has come about because landlords with income from furnished holiday accommodation in the UK have been treated as if they were trading, as long as they comply with the Furnished Holiday Lettings rules.

British owners of foreign properties have not been treated the same way but this may not comply with European legislation.

With changes in the Furnished Holiday Lettings rules due, the Government has decided that anyone with a qualifying holiday let in the European Economic Area who is also subject to UK capital gains and income tax should be treated as a trader.

However, the opportunity to reclaim tax only exists until April 2010 and Conti is therefore urging swift action on the part of those who fall into the following categories: property owners who have incurred losses from the letting of the property since 6th April 2003 and those who have made a profit from selling a property used for holiday lets since 6th April 2003.

For example, the owner of a commercially let overseas villa who incurs an annual loss may now be able to make a claim to offset the loss against UK income tax over the last five years.

In addition, someone who has sold an overseas property used as a holiday let and paid capital gains tax in the UK on the profit made may now be eligible for reliefs that could reduce the taxable gain.

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

Finally, Conti is offering property owners who think they may fall into either of these categories the opportunity to obtain a free tax review from one of its partners, Target Chartered Accountants, which specialises in UK and European tax.

According to Conti, Target will offer clients a free initial consultation and a fee will only be charged if a successful tax refund or reduction is achieved.

Source: www.homemove.co.uk