June 2023 to March 2024 exams Watch free ACCA TX lectures
Example 3 Dora House has employment income of £60,000 in 2022/23 and rental income received of £10,000.
She paid maintenance expenditure on the property in 2022/23 of £800 and mortgage interest
charges of £6,000.
Compute the 2022/23 income tax liability of Dora. 4. Furnished holiday lettings There are special rules for furnished holiday lettings.
The letting is treated as if it were a trade. This means that, although the income is taxed as income
from a UK property business, some of the provisions which apply to actual trades also apply to
furnished holiday lettings as follows:
(a)
Capital allowances (see chapter 5) are available on furniture
(b)
Income qualifies as earnings for pension relief (see chapter 10)
(c)
Capital gains tax rollover relief, gift relief and business asset disposal relief are all available (see
chapter 14).
The profit or loss is computed for tax years on a cash basis, but losses may only be carried forward
against future profits from furnished holiday lettings.
The lettings must be of UK or European Economic Area furnished accommodation made on a
commercial basis with a view to the realisation of profit.
In addition the following conditions must also be satisfied:
(a)
The accommodation must be available to let for at least 210 days in the tax year.
(b)
The accommodation must actually be let for at least 105 days in the year.
(c)
No one person occupies the property for more than 31 consecutive days. If one or more
persons do occupy the property for more than 31 consecutive days then these periods of long
letting must not exceed 155 days in the year.
