Tax on change of use of property - USERNAME: Casio - 25/07/2014

Tax Question:

Residential property let as furnished let then used as furnished holiday let. What could be the tax consequences on change over of the use?

Answer:

There would be no immediate consequence of the transfer. Obviously the property would qualify for additional CGT reliefs as a FHL and you'd need to take this into account in the event of a future disposal of the property, (including apportioning any gain between the historic use if relevant). However on the actual change of use there wouldn't be a deemed transfer or other tax implication.

You would also need to split the tax year for income tax purposes with the FHL income potentially qualifying for additional capital allowances.