What are the difference between having UK lettings and furnished holiday lettings (particularly abroad) the only thing i can see so far is:
- the pension aspect of it (which i need to do some more reading on)
- no wear and tear allowance
- can have PU aspect to it
is there anything else that i need to think about or has anyone had any problems with these?
Thanks in advance.
Replies (5)
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Possibly double taxation issues and foreign returns
Double taxation issues spring to mind, also I think in France the rules on inheritance (appreciate not really a tax issue) need considered.
I am afraid we personally run scared of these issues (not re France but Sweden) and refuse to rent out our house there ,expressly because whilst I can just about deal with our Swedish tax returns covering the annual property tax (like council tax) I cannot face having to deal with the property rental income/costs we would need to declare if we were to let the property. The compliance costs of paying a Swedish accountant to assist would possibly outweigh the net income (given labour rates in Sweden)
Presume your client would need to deliver returns to the French tax authorities?
French tax return
Hi
If its let as a holiday let in France you will need to register the business (before commencing)and put in an annual tax declaration
Regards
Jeremy Godwin
Not tax but client needs to consider
Thanks for the feedback, they haven't purchased anything yet, I'll look into the tax declaration, entrepreneurs relief and the inheritance tax, glad they haven't chose Sweden by the sounds of it, if anything else slings to mind, I would appreciate the feedback. Thanks
Whilst not from a business/tax perspective, the main consideration your clients may need to consider is how this business is going to operate and who will be in place near the property to manage all the issues that will arise.
As I said, I do not let our property, but I am also really lucky that my nearest neighbour in Sweden is fluent in English and keeps a watchful eye over the property/steps in when issues arise. (Frozen pipes and insurance claim, chimney badly damaged in storm, water pump needed replaced in well)
Whilst I am not involved in foreign furnished holiday lets I have been involved with UK FHL and know that there can be a fair bit of work re cleaning, laundry changes, handovers. I would not fancy running that in a foreign country unless I was both fluent in the language and available on site in a hurry if needed.
If it were my client I would want to find out if they have the required skills/time and if not remind them of the risks-any business that is 100% reliant on the efforts of others needs to ensure there is a first reserve re operations in case the relationship with the initial supplier sours suddenly, if this precaution is not taken the business can very much be open to near blackmail from its employees/ suppliers especially if the owner is some distance away or does not speak the language well.