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Sam, I have a follow up tax question around this same property

Resolved Question:

Sam,

I have a follow up tax question around this same property in Switzerland.
This time in concerns UK income tax.

I bought the property in 2008 while living in Switzerland whilst living in Switzerland, but never lived in it as I returned to the UK with my job.

Since then it has been available for holiday rentals through a local Swiss agent. It is available all year, and I book the weeks I want to stay in it (no more than 6 weeks per year).

The costs of runiing the place (mortgage interest, property management, concierge, utility bills etc).....is in excess of 20,000 CHF per year.
Because it only rents out on average 15 weeks a year (July, Aug, Feb, Xmas), the annual income received is only around 10,000 CHF.

I have always assumed that there is no net taxable income because it is available for rent all year (except the 6 weeks I use it), and therefore I can offset all annual costs against income.

However, I do have a concern that HMRC might take the view that because it only rents out for 15 weeks a year, I can only offset the proportionate level of cost ie 15/52 of the total annual bills - in this case there would be some liability.

Can you clarify please?

Rgds

Ray Powell
Submitted: 1 year ago.
Category: UK Tax
Expert:  Lindie-mod replied 1 year ago.

Hello,

I'm Lindie, and I’m a moderator for this topic. I sent your requested professional a message to follow up with you here, when they are back online.

If I can help further, please let me know. Thank you for your continued patience.

Best,

Lindie

Expert:  Sam replied 1 year ago.

Hi Ray

 

Thanks for your question and asking for me.

 

As the property is not within the UK or the EEA then I am afraid this has to be treated as just rental income,(rather than furnished holiday lets) and that being the case, you can only claim expenses that arise during the period of actual letting, so in essence 15/52 weeks, so this does need to be rectified with HMRC.

 

Thanks


Sam

Sam, Accountant
Category: UK Tax
Satisfied Customers: 12932
Experience: 26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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