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Lodge lettings

01 September 2009
Issue: 4221 / Categories: Forum & Feedback , Capital Gains
Will the proposals to remove the tax advantageous system for furnished holiday lettings have an adverse effect on existing claims to capital allowances?

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 lettings 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 but the...

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