Property

Question 1

Furnished holiday let

Answer 1

(1) Qualify for tax advantages
(2) All three qualifying tests must be met
(a) Availability test 210 days
(b) Occupancy test 105 days
(c) Pattern of Occupation must not be let to same tenant for 155 days
Benefits,
(1) Treated as “Trade for tax purposes”, so can claim capital allowances for furniture
(2) Loss relief
(3) Pension Contributions
(4) CGT holdover relief

Question 2

Rent a room Relief

Answer 2

(1) Renting to lodgers or if B&B as long as your main residence.
(2) Can receive up to £7,500 gross free of income tax
(3) If receive than this it is liable to income tax with no expenses deducted.
(4) Alternatively can elect to be taxed on the actual profits (Gross rent - expenses).

Question 3

How is income from property taxed?

(1) UK / Non UK Resident
(2) Overseas Rent
(3) Separate or pooled together

Answer 3

(1) Rent on UK Property Taxed on UK and non UK residents.
(2) Rent from overseas only taxed if UK Resident and shown separately on tax return.
(3) All UK property rent/expenses pooled together and treated as one trading business.

Question 4

When is the only time you can claim capital allowances for items in residential property?

Answer 4

Qualifying furnished holiday lets.

Question 5

Interest on a loan to purchase investment property

Answer 5

(1) In 19/20 25% can be deducted from income (so they get tax relief at highest marginal rate)
(2) 75% restricted to BRT relief
* Does not apply to furnished holiday lets
This changes in April 2020 see article saved in bookmark

Question 6

Residential Letting Exemption from CGT

Answer 6

See CGT notes