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Checking Furnished Holiday Let property occupancy

15 February 2024

The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for tax purposes. In order to qualify as a furnished holiday letting, the following criteria need to be met: The

The furnished holiday let (FHL) rules enable property owners who meet specific conditions to treat holiday lettings as a trade for 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 the intention of realizing profits. Second homes or properties let occasionally or to family and friends do not meet the criteria.
  • It must be located in the UK or a country within the EEA.
  • Property must be furnished. This means that there must be sufficient furniture provided for normal occupation and your visitors must be entitled to use the furniture.

In addition, the property must pass the following 3 occupancy conditions.

  1. Pattern of occupation condition. 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).
  2. Next, the availability condition mandates that the property must be commercially available for letting at commercial rates for a minimum of 210 days per year.
  3. Letting condition. The property must be let for at least 105 days per year and homeowners should be able to demonstrate the income from these lettings.

In a business with multiple furnished holiday lettings properties, property owners can make an averaging election to calculate the days of lettings for qualifying the 105 days threshold.

Homeowners can also make a special period of grace election, enabling them to consider a year as a qualifying year for the furnished holiday let rules. This applies when they genuinely intended to meet the occupancy threshold but were unable to do so, subject to specific qualifying conditions.

Source: HM Revenue & Customs Mon, 12 Feb 2024 00:00:00 +0100

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