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Property Income - Further Aspects (Furnished Holiday Let (FHL) (Conditions…
Property Income - Further Aspects
Overseas Properties
Losses have to be carried forward
Losses from overseas cannot be offset against properties in the UK
Furnished Holiday Let (FHL)
Conditions
In the UK or European Economic Area (EEA)
Available for letting for 210 days
Must be furnished
Must be let out for 105 days out of the 210 availability days
Longer-term Occupation
More than 31 days in the property does not qualify for FHL
Advantages of FHL
Treatment of profits as earned income - important as pension contributions can be made based on the level of income
Losses
Can only be offset against other FHL
Total losses can only be offset against profits in the following years
ITTOIA 2005 ss.322-328
Real Estate Investment Trusts (REITs)
Rental Income and gains from disposal are exempt from Corporation Tax
Treated as dividend - 20% already taken off
Premium on Leases
Over 50 year lease - no income tax charge
Short leases are less than 50 years
Premium less 2% x premium x (number of years on lease - 1) = Property Income
ITTOIA 2005 ss.277-307
Sub-lease
Same formula used below
Property Income for Landlord x Length of sub-lease/length of head-lease
ITTOIA 2005 s.288