Furnished Holiday Lettings Tax Helpsheet

Last Updated on January 3, 2012 by Mark Lavington

Furnished holiday lettings have for many years benefited from being treated as a trade for income tax purposes giving commercially let holiday home owners some tax advantages over other lettings. 
The special rules for Furnished Holiday Lettings (FHL) for 2011-2012 have changed and they will change again in 2012-2013. There are significant changes regarding the Qualifying tests and it is for this reason that HMRC have released an advanced copy of Helpsheet 253 – Furnished Holiday Lettings to help owners plan their lettings in order that they may continue to qualify.
FHL Qualifying Tests for 2011-2012 and for 2012-2013 and later
All three of the following tests must be satisfied if a letting is to qualify:
1. The availability condition (availability test/threshold) – during the period (normally the tax year), the accommodation is available for commercial letting as holiday accommodation to the public for at least 140 days (210 days for 2012–13 onwards).
2. The letting condition (occupancy test/threshold) – during the period the accommodation is commercially let as holiday accommodation to the public for at least 70 days (105 days for 2012–13 onwards).

3. The pattern of occupation condition – the accommodation must not be let for periods of longer-term occupation for more than 155 days during the year.

 
For those contemplating longer lets of 31 days or more, be warned that these will not qualify towards your qualification. More information is available in HMRC’s Helpsheet 253 – Furnished Holiday Lettings and your normal tax adviser. You may also wish to begin discussions with your holiday home letting agent on what measures you may need to take in order to maximise your occupancy rates and therefore continue to qualify from the valuable FHL tax benefits. 

As furnished holiday lettings insurance specialists our holiday home insurance policy holders benefit from cover that is designed around the needs of commercially let holiday homes, apartments and cottages. We have no restrictions on the number of weeks that your second home may be let throughout the year. For more information about holiday let insurance, visit www.boshers.co.uk 
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