The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for specific tax purposes. Individuals, partnerships, trustees and companies who let furnished holiday accommodation situated within the UK or elsewhere in the EEA can benefit from having a FHL. HMRC’s guidance on the scheme has recently been updated.
Landlords of furnished holiday lettings are not affected by the new rules introduced this tax year that are gradually restricting tax relief on mortgage costs for residential properties to the basic rate of tax. This increases the tax benefits of the scheme, however careful consideration must be given to help decide whether a furnished holiday let is a good investment.
In order to qualify as a furnished holiday lettings, the following criteria need to be met:
Where the qualifying conditions are not met during the relevant period, the furnished holiday lettings rules do not apply for that tax year or accounting period. In that situation, the normal property income rules will apply for that tax year or accounting period.
Bron: HM Revenue & Customs | 20-04-2017
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