Holiday lettings to qualify for new tax relief

Furnished holiday lets are to qualify for the latest capital gains tax relief. Entrepreneurs relief will apply from April 2008, and will carry on where business taper relief left off. Private lettings won't qualify but furnished holiday lets will. This relief will therefore exempt a proportion of the capital gain (4/9) on the dispsoal of furnished holiday lets. The rest of the gain will be taxed at 18% leading to an effective 10% rate of CGT. This is the same rate that applied under taper relief. You'll need to make sure that the gains are less than £1,000,000, though to qualify for the 10% effective rate on the whole of the gain. This £1,000,000 is a lifetime limit although even if exceeded the effective rate of CGT can still be much more beneficial.