26 September 2005

Letting to holidaymakers in the UK

It's the time of year when you come back from a fortnight's break and start fantasising about buying a little place in your favourite holiday location.

Investing in a holiday property in the UK offers plenty of tax advantages, says Sheena Hay, the senior tax manager at Grant Thornton. 'Furnished holiday lettings in the UK are very flexible in tax terms. There are lots of allowances and you don't need to produce a balance sheet like a full-blown business. You can just fill in the details on your tax form.'

Ian Luder, a tax partner at Grant Thornton, says the advantage of a UK property is that you don't have to worry about currency fluctuations or an unfamiliar legal system. What is more, expenses such as rents, rates, insurance, utility bills and repairs can be deducted against income. You can also offset the cost of improvements to the property, as well as gardening, cleaning, and legal and professional costs when you are calculating your tax bill.

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