PROPERTY: What classifies a furnished holiday let?
A furnished holiday let (FHL), or portfolio of FHL’s, may or may not be a good investment, depending on the property location and personal circumstances.
For tax purposes though, genuine holiday let businesses that fit set criteria can claim tax relief in a similar way to that of any regular trade and valuable tax relief is available. Because of abuse in past years with people trying to claim tax relief on expenses for their second homes, the rules have tightened.
To qualify as a FHL, the property must:
- Be in the UK or within the EEA
- Be let commercially, with the aim to make a profit
- Be available to let for a minimum of 30 weeks per year
- Be priced at a commercial market rent
- Be filled for a minimum of 15 weeks per year, If more than one FHL is owned then the average can be taken across all properties to meet requirements
- Not be rented for more than 31 days at a time
There is an allowance of one year where by lettings can fall under the minimum requirement, if it can be demonstrated that there was an intention to meet conditions.
If you have a Furnished Holiday Let business already or are thinking of investing, contact Figurit with any tax related questions so you can ensure you meet criteria.
020 7376 9333
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