How JustAnswer Works:
  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.
Ask bigduckontax Your Own Question
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4954
Type Your Tax Question Here...
bigduckontax is online now

Keith,i own a holiday property in Greece and

This answer was rated:

Hello Keith,i own a holiday property in Greece and for the last e ye
Hello, i own a holiday let in Greece but for the last 3 years i have not met the qualifying rules for occupation but could qualufy as i did 4 years ago. Since i cannot declare the retal income on this years return as a holiday let because the exemption no longer applies how do i now declare on my tax return? As foreign income? Can i still deduct my cleaning and laundry expenses. I do not have a mortgage on this property.
Hello, I'm Keith and happy to help you with your question.
Whether you meet the Greek qualifing rules is irrelevant; you are still liable for UK taxation on the rentals and these should be declared on your annual self assessment tax return. Under the Double Taxation Treaty between the UK and Greece any tax paid on these rentals to the Greek tax authorities is allowable as a tax credit against any UK tax liability on the same income stream.
Here is the Whitch guide as to what may be deducted from rentals to reduce your UK tax liability:
'The most common types of expenses you can deduct are:
Water rates, council tax, gas and electricity
Maintenance and repairs to the property (but not improvements)
Contents insurance
Interest on a mortgage to buy the property
Costs of services, including the wages of gardeners and cleaners (as part of the rental agreement)
Letting agents' fees
Legal fees for lets of a year or less, or for renewing a lease of less than 50 years
Accountant’s fees
Rents, ground rents and service charges
Direct costs such as phone calls, stationery and advertising for new tenants
The expense should be incurred wholly and exclusively as a result of renting out your property.'
Which add that their lit is not exhaustive and I would suggest that cleaning and laundry expenses would definitely for part of the direct costs of running the business.
I do hope that I have assisted you with your inquiry.
Customer: replied 3 years ago.

Hello Keith, the qualifying i a talking about is on the uk hmrc tax return for eu holidag lettings. It is about the number of days per annum that it is let. I met the qualifying number of days 4 years ago but they upped the number of days the year after and i have not met this since. You are allowed to continue for 3 years not meeting this qualification and then you are not allowed to declare as a holiday let again. So my question is that i cannot declare as a holidah let this year but i must of course declare the income - so i must put this on the foreign pages? I have expenses in cleaning but no mortgage -

You would need to declare this income as foreign income in boxes 14 - 32 on form SA106. In fact it's exactly the same declaration was it was for furnished holiday lettings.
Customer: replied 3 years ago.

So in your opinion i would be able to offset expenses against it as detailed earlier? I presume that hmrc have a reason for not allowing further ddclarations on the holiday lettings page? What the disadvantage here? Is it sonething to do with losing capital allowances.

Firstly sorry for the delay in response, I was watching the Grand National and no, I didn't have a bet!
Here, from Morris & Co, Chartered Accountants, are the capital Gains Tax advantages of Furnished Holiday Lettings:
'A sale of a furnished Holiday home should qualify for Entrepreneurs relief. Consequently both basic rate taxpayers and higher rate taxpayer selling a Furnished Holiday let have an effective tax rate on sale of just 10%.
The various CGT reliefs that apply to businesses also apply to holiday lets, Two other tax relief are therefore potentially available on disposal of a Furnished Holiday Let, firstly the ability to “roll-over” any gain made on sale into the purchase of another qualifying business asset, including another Furnished Holiday Let, and secondly the ability to “hold-over” any gain arising on gifting the property. This has the effect of deferred any capital gains tax until the new owner sells the property.'
The ability to receive Entrepreneurs' Relief is a huge advantage as it is not available against other rented property gains. You can see the logic behind limiting this relief whenever possible from a Revenue standpoint.
Yes, you can still offset all the expenses I have mentioned against holiday letting rentals.
bigduckontax and other Tax Specialists are ready to help you
Thank you for your support.