Investment planning: Boom in holiday lets and more

 Contents:

• Boom in holiday lets
• Thousands of teenagers missing out on Child Trust Fund cash

Boom in holiday lets

(AF4, FA7, LP2, RO2)

More than 11,000 second homeowners in England have flipped their properties to become holiday lets since the start of the COVID pandemic, research by real estate advisers the Altus Group shows.

According to the BBC, analysis of Government figures by real estate advisers the Altus Group, reportedly shows the number of holiday homes trading as businesses has increased by more than 20%.

The data shows 67,578 homes classified as holiday homes have been flipped to become commercial premises, compared to 56,102 properties in March last year.

Almost 4,000 homes have been flipped in South West England alone since the start of the pandemic, amid record visitor numbers in Cornwall and Devon.

Meanwhile, the South East also has also seen a significant rise in the number of new lets, with a 27% rise - or 1,458 properties.

According to the Treasury, in its press release on 23 March (aka Tax Day) “….of the over 60,000 holiday lets currently on the business rates list, around 96% have a rateable value which would likely qualify them for Small Business Rates Relief and as a result pay no business rates at all”. For more information on Small Business Rates Relief, please see here.

The Government is planning to legislate to tighten tax rules for second property owners in England. The Ministry of Housing, Communities and Local Government (MHCLG) issued a consultation paper on this topic last November. On Tax Day the Treasury confirmed that the MHLCG would be issuing a response “shortly”, but in the meantime confirmed that “The government will legislate to change the criteria determining whether a holiday let is valued for business rates to account for actual days the property was rented”.

Thousands of teenagers missing out on Child Trust Fund cash (FA5)

Teenagers are being urged by HMRC to check if they have a pot of money waiting for them in a Child Trust Fund.

At 16 years, a child can choose to operate their Child Trust Fund (CTF) account or have their parent or guardian continue to look after it, but they cannot withdraw the funds. At 18 years of age, the CTF account matures and the child is able to withdraw money from the fund or move it to a different savings account.

It is now one year since the first account holders started turning 18 and, according to HMRC, around 55,000 CTFs mature every month. This means their owners can withdraw funds or transfer savings into an adult ISA. Hundreds of thousands of accounts have been claimed so far, but many have not.

CTFs were set up for all children born between 1 September 2002 and 2 January 2011 with a live Child Benefit claim. Parents or guardians set up these accounts with CTF Providers – usually banks, building societies or investment managers – using vouchers provided by the Government. If an account was not opened by the child’s parent, HMRC set one up on the child’s behalf.

Between 2002 and early 2011, about six million CTFs were opened by parents or guardians, with a further million set up by HMRC.

Economic Secretary to the Treasury, John Glen, said:

“It’s fantastic that so many young people have been able to access the money saved for them in Child Trust Funds but we want to make sure that nobody misses out on the chance to invest in their future.

If you’re unsure if you have an account or where it may be, it is easy to get help from HMRC to track down your provider online.”

Some young people may not know they have a CTF – or some parents or guardians may have forgotten who they set the account up with. To help them find their accounts, HMRC has created a simple online tool.

Any young people unsure about whether or not they have a CTF should first ask a parent or guardian if they remember setting one up. Once they know who their provider is, they should contact them directly – and either request to withdraw the money or transfer the funds into an adult ISA or other savings account.

For those who cannot access the tool, HMRC will provide alternative, non-digital routes to finding a CTF provider upon request. HMRC will send details of the provider by post within three weeks of receiving their request.

For more information, please see HMRC’s guide: 10 things you need to know about Child Trust Funds.

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