Simmers & Co
Topical
Points Answer
We live
in the UK and are buying a holiday home abroad. If we charge our friends a
modest fee to use it, do we have to pay tax on the income?
For UK
purposes, any income you receive from the property will be taxable. However,
you will be able to offset some expenses against the income, including some of
the interest on the loan used to purchase the property. It is possible that the
allowable expenses will be more than the actual income you receive.
When you
sell the property, any profit you make on the sale will be subject to capital
gains tax. There are various reliefs available which will help reduce the
amount payable.
You will
also need to consider the tax position of the country where the property is
situated.