Second homeowners ‘exempt from inheritance tax’

Posted 30 Dec 2008

Letting out a holiday home can mean the owner is exempt from inheritance tax, an industry expert has said.

DHC Accounting explained that a lot of properties abroad are valuable and the people who own them can be wealthy.

If second homes are let to people going on holiday or working abroad – perhaps in a TEFL job – then owners can receive additional benefits as well as extra income, it said.

Tony Briscoe, director of the tax advisory firm, said: "The biggest benefit is that for inheritance tax purposes it is treated as business."

Properties have to be owned for two or more years but most holiday-let homes should qualify, he added.

According to research by Holiday Cottages Group, the current economic climate is making 55 per cent of second homeowners plan to join the holiday lettings market and women are more likely than men to become landlords.

Figures also showed that 63 per cent of holidaymakers are planning to stay in holiday homes next year rather than hotels.

Category: Living Abroad