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Check if your Holiday let property is qualifying

Source: HM Revenue & Customs | 09/01/19

The Furnished Holiday Let (FHL) rules, allow holiday lettings of properties that meet certain conditions to be treated as a trade for some specific tax purposes.

In order to qualify as a furnished holiday letting, the following criteria need to be met:

  • The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify.
  • The property must be located in the UK, or in a country within the EEA.
  • The property must be available for commercial letting at commercial rates for at least 30 weeks (210 days) per year.
  • The property must be let for at least 15 weeks (105 days) per year and home owners should be able to demonstrate the income from these lettings. 
  • The property must not be used for more than 155 days for longer term occupation (i.e. a continuous period of more than 31 days).
  • Where there are a number of furnished holiday lettings properties in a business, it is possible to average the days of lettings for the purposes of qualifying for the 15 weeks threshold. This is called an averaging election.

There is a special period of grace election which allows homeowners to treat a year as a qualifying year for the purposes of the furnished holiday let rules, where they genuinely intended to meet the occupancy threshold but were unable to do so subject to a number of qualifying conditions.

In any other cases, where the qualifying conditions are not met the normal property income rules apply. Trading losses from a furnished holiday lettings business can only be set off against qualifying future FHL profits.

Planning note

This is a good time to review your actual occupancy in the current tax year and if necessary, look for further bookings before the end of the current tax year. This should be done to ensure that you have met the minimum qualifying requirements and to benefit from the special FHL tax rules. If you need help crunching the numbers, please call.

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Some accountancy websites also provide pages and pages of tax information, helpsheets, etc. We prefer to give clients personally tailored advice. So, if you want details of tax rates and allowances just go to the HMRC website on which you should find what you’re looking for. If you need more individual advice please contact us.

Below are links to websites you may find of interest, but as we like to support our local community and clients, we have included links to websites that may be of interest:

HMRC

FT

BBC

VEALE WASBROUGH VIZARDS

CESP

PRACTICE INDEX

SIMCOMM ACADEMY

More Local:

FOOTPLATE EXPERIENCE

ANGLEBURY PRESS

OFFCAMBER.CO.UK

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Sandisons is the trading name of Sandisons Limited. Registered office: Badger House, Salisbury Road, Blandford Forum, Dorset DT11 7QD.  Co. Reg. No. 05068291

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