
Furnished Holiday Lettings
The preferential tax status for Furnished Holiday Lettings (FHL) has been enjoyed for many years by taxpayers who have been involved in the “commercial letting of furnished holiday accommodation” in the UK, and in recent years by taxpayers with holiday accommodation elsewhere in the European Economic Area (EEA).The letting of accommodation is commercial if the accommodation is let on a commercial basis with a view to realising profits. HM Revenue & Customs would expect the business to make a profit within five years from the date of commencement of FHL activities, although this may be extended in exceptional circumstances.The current rules are to be changed over the next year with some changes being implemented from April 2011 and others from April 2012.The following table details the current and proposed rules in respect of accommodation being “qualifying holiday accommodation”:
Current | From April 2012 | |
Number of days property has to be available for commercial letting to the public generally in the 12 month period | at least 140 | at least 210 |
Number of days property actually let for in the 12 month period - not including any lettings that are longer than 31 consecutive days (longer-term occupation) | at least 70 | at least 105 |
Number of days relating to longer-term occupation allowed | up to 155 | up to 155 |
Properties situated within | the EEA (by retrospective extension on 22 April 2009) | the EEA (by inclusion in the legislation) |
- Investing for children and grandchildren
- Capital Allowances
- Furnished Holiday Lettings
- A Fair Exchange?
- Proposed general rules on residence status for UK tax purposes
- Working Tax Credit and Child Tax Credit