Alternatives for investors in residential accommodation

Key points

• Tax benefits of furnished holiday lettings.
• Particular tax issues can apply to hotels.
• Increasing demand for student accommodation.
• A property portfolio can benefit from SDLT reliefs.

Purchasers from abroad and those in the UK tend to favour buy-to-let properties as an investment choice but many non-domiciles are unaware that the UK has an estate duty in the form inheritance tax and this together with the other tax impositions rather dampens their enthusiasm in this regard. Further buy-to-let property is proving to be a cash cow for the Treasury with stamp duty land tax (SDLT) increases restrictions in tax relief for loan interest the replacement of the 10% wear and tear allowance and further capital gains tax impositions to come. So is it time to find another tax-efficient property alternative? The list of possible alternatives less burdened with excessive tax is surprisingly long: furnished holiday lets;...