Shorthold Tenancy to Holiday let-CGT
Discussion
One of my tenants will be leaving shortly and I am thinking about using the Property for holiday lets.
Currently CGT would be at either 18 or 28% on a complete disposal.
I understand that Business Asset Disposal Relief applies to property used for holiday lets providing that the business has been running for for at least 2 years.
If I start holiday lets and then dispose of the property after 2 years will I just pay 10% on the gain or the higher rates on the period when it was a residential tenancy and the lower amount on the holiday let period?
Currently CGT would be at either 18 or 28% on a complete disposal.
I understand that Business Asset Disposal Relief applies to property used for holiday lets providing that the business has been running for for at least 2 years.
If I start holiday lets and then dispose of the property after 2 years will I just pay 10% on the gain or the higher rates on the period when it was a residential tenancy and the lower amount on the holiday let period?
Not directly relevant to your question but worth noting the 'evidence' required for council tax exemption is set to get tougher https://www.cityam.com/govt-to-crack-down-on-secon...
From distant experience, bookings for a new FHL can build slowly so you won't necessarily meet the 70 day test in year 1 without good marketing.
From distant experience, bookings for a new FHL can build slowly so you won't necessarily meet the 70 day test in year 1 without good marketing.
jmn said:
One of my tenants will be leaving shortly and I am thinking about using the Property for holiday lets.
Currently CGT would be at either 18 or 28% on a complete disposal.
I understand that Business Asset Disposal Relief applies to property used for holiday lets providing that the business has been running for for at least 2 years.
If I start holiday lets and then dispose of the property after 2 years will I just pay 10% on the gain or the higher rates on the period when it was a residential tenancy and the lower amount on the holiday let period?
I am not an accountant, but I seem to recall that the tax treatment is proportional to the time the property has been a FHL. So you can't amass a huge gain as a BTL, make it a FHL briefly and pay the lower rate on the whole gain.Currently CGT would be at either 18 or 28% on a complete disposal.
I understand that Business Asset Disposal Relief applies to property used for holiday lets providing that the business has been running for for at least 2 years.
If I start holiday lets and then dispose of the property after 2 years will I just pay 10% on the gain or the higher rates on the period when it was a residential tenancy and the lower amount on the holiday let period?
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