New queries, issue 4218

11 August 2009

Issue: 4218 / Categories: Forum & Feedback

Capital allowances on furnished lettings; the tax treatment of barter transactions; disposing of a property in a prize draw; and a charitable donation by a company

Lodge lettings

Following on from the points raised on furnished holiday lettings and entrepreneurs relief (ER run off) does anyone have any views on what the capital allowances position is with regard to assets that have been used in a furnished holiday lettings business.

Our client owns a holiday park and some of the properties on the site are owned by individuals who rent out their lodges to holidaymakers. It was successfully agreed with HMRC many years ago that these lodges are plant and machinery and therefore qualify for capital allowances.

With the abolition of furnished holiday letting status from 6 April 2010 will there be a deemed disposal of these lodges at market value? In many cases these have appreciated in value since acquisition so there will be balancing charges arising.

Clearly the activity of letting out the lodges will continue ...

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