Meg Saksida looks at the impact of owning a caravan on income tax, capital gains tax and the statutory residence test
Depending on how a caravan is used (e.g., let or simply used by the taxpayer), the tax impact of owning the caravan may span several different taxes, from income tax (including capital allowances) through to capital gains tax (CGT), inheritance tax (IHT) and may even impact the statutory residence test (SRT).
Property income or trading income
How the income from the letting of caravans is treated depends on the scale of the operation. If there are more than one or two caravans, the letting may be treated as a trade and taxed as trading income. If the caravan is let on a long-term basis, it would be treated as a normal let property under the property income rules.
However, if the caravan is furnished and the annual lettings satisfy the
