Furnished Holiday Lets, Lockdown and Tax

There are certain letting conditions that must be met for a letting business to qualify as a Furnished Holiday Let (FHL). These are important as FHL businesses qualify for a number of tax allowances and reliefs that other letting businesses don’t.

The business must meet the following criteria;

1. The accommodation must be available for commercial letting to the public generally as holiday accommodation for a minimum of 210 days during the ‘relevant period’.

2. The accommodation must be commercially let as holiday accommodation for a minimum of 105 days during the ‘relevant period’.

3. During the ‘relevant period’, there must not be more than 155 days falling in ‘periods of longer-term occupation’. Periods of longer-term occupation are lets of a continuous period of more than 31 days in duration.

Depending on how long the lockdown lasts, it may be difficult for landlords to meet the ‘letting condition’ for the year in question. However for those landlords who had at least one year of operation prior to 20/21, the year most affected, there is the ability to claim a “period of grace”

To make a period of grace election the tax payer must be able to show that;

1. they had a genuine intention to let the property but the lettings are cancelled due to unforeseen circumstances,

2. the property met the conditions in the tax year before they wish to make the election. If the property doesn’t meet the letting conditions in a second year, they can make a second period of grace election.

Hence the “period of grace” election will aid those tax payers who have had at least one year prior to the onset of the pandemic where the conditions for a FHL were met. This will enable the tax payer to retain the benefits of the FHL status.

“Relevant period”
1. for those businesses commencing in a tax year, 12 months from commencement,
2. for those ceasing in a tax year, 12 months before cessation
3. for those continuing, the tax year


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