Hundreds of thousands of Britons who own second homes in Europe could receive a windfall of up to five years’ worth of tax paid back to them by HM Revenue & Customs (HMRC).
Rebecca O’Connor, The Times – 25 April 2009
In a bizarre twist to a change in tax law slipped out by HMRC alongside the Budget this week, it emerged that owners of furnished holiday lets on the Continent would be given the opportunity to apply retrospectively for a tax break previously reserved only for owners of UK-based holiday lets.
The change will simultaneously penalise owners who let out their UK properties to holidaymakers as the tax break will be scrapped altogether next April, forcing them to pay thousands of pounds extra a year to HMRC.
The decision, which will prove embarrassing for the Government, states that from April 6, 2010, furnished holiday lets in the UK will no longer be treated as business assets, against which owners can offset losses against their other income and roll over capital gains tax to reduce their tax bill. The break was originally introduced in the 1980s as a way of encouraging British tourism.
