Bright outlook for holiday home tax payers
20th April 2007

Naylor Wintersgill are advising owners of overseas holiday homes, who acquire their property through a limited company, that they will no longer face a potential ‘benefit-in-kind’ tax charge for its private use.

Under the new legislation, included in the Finance Bill 2007, the benefit-in-kind tax which could potentially be charged on the properties- effectively an income tax charge on the property’s assumed annual income- has been abolished. The removal of this charge is also retrospective so that owners who have paid tax can now claim a refund from HM Revenue and Customs by amending their 2005/6 returns.

The removal of the charge applies to companies whose sole activity is holding the property for personal occupation and/or letting.

Vaughan Houldsworth, Tax Partner at Naylor Wintersgill, commented,

‘The move has been universally welcomed as, for many years, there has been criticism of a system which charges individuals who have purchased a holiday home through a limited company, using their own resources.’ 

Further information is available from Naylor Wintersgill on 01274 733184.