- An OTS review focused on opportunities to simplify the tax and administrative treatment of individuals, partnerships and micro-companies deriving income from residential property.
- The OTS published their report for the property income review on 1 November 2022. The key recommendations were:
- Abolish the 50:50 deeming rule for spouses.
- Consider reform of the furnished holiday letting (FHL) regime.
- Consider broadening income tax relief for capital expenditure.
- Improve the proposals for the application of MTD to joint property income, deferring the start date until the issues are resolved.
- Timing: following the publication of the OTS findings on 1 November 2022, the previous government considered the issue and the timing of reform (if any). As this report was requested by the previous government, it is not clear whether the new government is considering the outstanding issues. Although not in direct response to the OTS review, the previous Chancellor announced at the Spring Budget 2024 that the FHL regime will be abolished with effect from 6 April 2025. The current government are continuing with abolishing the FHL regime.
Resources (click to open)
- OTS report on their Review of residential property income (published 1 November 2022)
- Review of Property Income - Survey and Call for Evidence - GOV.UK (www.gov.uk) (OTS, closed on 5 June 2022)
