The Office of Tax Simplification has published a new report Property income review: simplifying income tax for residential landlords focusing on the UK taxation of income from residential property mainly in relation to individuals.
On the furnished holiday lettings (FHLs) regime the report found that this provides some tax benefits but it is not widely used and adds complexity to the tax rules. It suggests that the government should consider whether there is continuing benefit to the UK in having a separate tax regime for FHLs.
However the report acknowledges that removing the FHLs regime could put pressure on the boundary between whether a taxpayer has a property business or a trade. Therefore it asks whether it would be appropriate to introduce a statutory ‘bright line’ test to define when a property business should be handled under the trading rules.
Many respondents...
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