Tax on Spanish holiday home

[MrCheese]

I'm thinking of buying an Spanish apartment for around £75k. It would be used by me for 2 weeks a year and rented out for the rest of the year as a short-term holiday let thru an agency.

Now, I want to plan for the worst case - say nobody wants to stay there and I only get 1 weeks rental income. If my mortgage is 100% interest only, what can I offset as a loss against the 1 weeks income - 1 weeks worth of interest payments or the 50 weeks interest payments that are made when the property is available (but unlet). Can the loss be offset against other employment income unrelated to the property?

Any comments appreciated!

[Taxation Solutions]

MrCheese

If you make a rental loss on an overseas property, the loss can only be offset against future profits from your overseas property.

Rental income is taxed in the UK as a seperate stand alone business and losses can't be set against your UK income.

Jason
www.propertytaxation.co.uk