Tax information

[Japy]

I've recently purchased dvc points and wanted to ask if someone could post a link to a gov.uk site which explains the taxes due if I rent out the points and any permitted deductions. I've searched under lots of different timeshare questions and can't find anything. Thank you

 

[Ruttangel]

Yeah, it is difficult to find clear information.
I would be interested to hear what @macman123 has done.
I am currently going by this guidance which says first £1k tax free, I also know that some elements of the dues would come off the rental income as allowable expenses.
I'm also assuming we get 2x£1k as me and DH are joint owners.
https://www.gov.uk/renting-out-a-property/paying-tax

 

[Ruttangel]

2021 Statement Breakdown
Operating and Capital Reserves

Resort	Item / Expense	Vacation Points	Rate	Days Prorated	Annual Dues Assessment
AKV2	Operating	160	5.3239	365	$851.81
AKV2	Reserves	160	1.2029	365	$192.45

Property Taxes

Resort	Item / Expense	Vacation Points	Rate	Days Prorated	Annual Dues Assessment
AKV2	Estimated Property Taxes	160	1.5463	365	$247.39

So, from the breakdown above I would use the operating and taxes pp to come to $6.8702pp as deductible. Capital reserves being excluded.
So, if I rent 100 points at $15 then I’m showing $8.1298 (15-6.8702) as income.
At an exchange rate of 1.38 that would be £5.89 or for 100 points a total of £589 to declare, split between us at £294.50 each, so well under £1k.

Edit, I believe only a pro-rata of these costs would apply so in my example 100/160 points x yearly dues. I’ll also look for more concrete advice
Anyone else have an alternate view?

 

[Japy]

I would've thought it was a "furnished holiday let" and I read somewhere that only the property taxes would be deductible. But its very unclear on the gov.uk website so I really don't know

 

[Ruttangel]

I would've thought it was a "furnished holiday let" and I read somewhere that only the property taxes would be deductible. But its very unclear on the gov.uk website so I really don't know

I thought furnished holiday let is for UK/EEA properties but yes I'm no expert here, just explaining the guidance I'm using if they ever ask!

 

[Tony]

Whilst your diligence is to be applauded, taxes aren't cut and dry. As you say there's a £1k allowance and there's also a roll-over aspect. The fact you've "made" a few hundred pounds as a one-off here really isn't what HMRC are worried about. It's the person who has been renting out a second (and third, fourth & fifth) home in Cornwall for £4k a week for the last six months that they'll be angling for.

 

[Ruttangel]

The fact you've "made" a few hundred pounds as a one-off here really isn't what HMRC are worried about. It's the person who has been renting out a second (and third, fourth & fifth) home in Cornwall for £4k a week for the last six months that they'll be angling for.

Well yes, do nothing is always another option and hope you fly under the radar. Not sure that's what OP wants to do though.