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Quarterly news:

Summer 2022

Homes for Ukraine scheme and what landlords need to know

Payments received under the Homes for Ukraine sponsorship scheme are free of tax. Legislation setting this out will be included in the next Finance Bill, with retrospective effect from the date of payment.

The scheme in practice

This means that Homes for Ukraine sponsorship payments made by local authorities are exempt from income tax and corporation tax. Neither are they chargeable to National Insurance contributions.

It is important to remember, however, that as sponsorship payments are not taxable, the consequence is that tax relief is disallowed for expenses that might otherwise have been set off against taxable income. This covers, for example, expenses incurred by landlords in relation to the property.

Furnished holiday lettings

The rules for properties used as furnished holiday lets (FHLs) are currently unchanged. FHLs benefit from bespoke tax rules, one key qualifying condition being the requirement that property is let at a commercial rate for 105 days each year. A written statement from the Treasury in March indicated that there was, at that stage, no intention to relax this requirement. We continue to monitor the position here and will advise of any developments.


For those who hold property through a company, the position with regard to relief from the Annual Tax on Enveloped Dwellings (known as ATED), and the higher 15% rate of Stamp Duty Land Tax (SDLT) is also important. Companies which already qualified for such relief for dwellings used in a property development, or property trading business, or because let on a commercial basis, will still be able to claim the reliefs while the dwellings are used in the Homes for Ukraine scheme.

Further, a company purchasing a property for a purpose that would otherwise be relievable from the 15% rate of SDLT, will still be able to benefit from the relief, even if the property is temporarily used for the Homes for Ukraine scheme. If a dwelling does not currently qualify for relief from ATED before inclusion in the scheme, ATED relief will, nonetheless, be available from the point of occupation where the whole dwelling is used for the scheme.

The provisions on ATED will have effect from 1 April 2022 and from 31 March 2022 for SDLT.

We are always happy to help you navigate the rules on property tax. Do please contact us to explore tax efficient ways to manage your property portfolio.

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