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Limited Company
Furnished Holiday Lettings

 

 

There are special tax rules for rental income from properties that qualify as Furnished Holiday Lettings (FHLs).

If you let properties that qualify as FHLs:

 

  • you can claim Capital Gains Tax reliefs for traders (Business Asset Rollover Relief, Entrepreneurs’ Relief, relief for gifts of business assets and relief for loans to traders)

  • you are entitled to plant and machinery capital allowances for items such as furniture, equipment and fixtures, as well as integral features

  • the profits count as earnings for pension purposes

 

The following conditions must be met for a property to qualify as furnished holiday let:

 

  • The FHL property must be available for commercial holiday letting to the public for at least 210 days per year AND be actually let as holiday accommodation for 105 days per year.

  • It must not normally be let for a continuous period of more than 31 days to the same tenant in seven months of the year.

 

There are two ways to help owners of FHLs to reach the above thresholds. If an owner owns more than one FHL the ‘averaging’ election might be helpful and if a FHL meets the thresholds in some years but not in others, then a ‘period of grace’ election is currently available.

 

  • The property must be located in the UK or EEA. All FHL properties which are located in the UK are treated as one ‘business’ and all properties located in other EEA states are taxed as a separate ‘business’.

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