Furnished holiday let qualifying tests
The furnished holiday let (FHL) rules allow holiday lettings of properties that meet certain conditions to be treated as a trade for certain tax purposes.
In order to qualify as a furnished holiday letting, the following criteria need to be met:
- The property must be let on a commercial basis with a view to the realisation of profits. Second homes or properties that are only let occasionally or to family and friends do not qualify.
- The property must be located in the UK, or in a country within the EEA.
- The property must be furnished. This means that there must be sufficient furniture provided for normal occupation and visitors must be entitled to use the furniture.
In addition, the property must pass the following 3 occupancy conditions.
- Pattern of occupation condition. The property must not be used for more than 155 days for longer term occupation (i.e. a continuous period of more than 31 days).
- The availability condition. The property must be available for commercial letting at commercial rates for at least 30 weeks (210 days) per year.
- The letting condition. The property must be let for at least 15 weeks (105 days) per year and homeowners should be able to demonstrate the income from these lettings.
Where there are a number of furnished holiday lettings properties in a business, it is possible to average the days of lettings for the purposes of qualifying for the 15 weeks threshold. This is called an averaging election.
There is also a special period of grace election, which allows homeowners to treat a year as a qualifying year for the purposes of the furnished holiday let rules, where they genuinely intended to meet the occupancy threshold but were unable to do so, subject to a number of qualifying conditions.
Newsletter
With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!
Latest news
- Tax Diary May/June 2024
18/04/2024 - More...
1 May 2024 - Due date for corporation tax due for the year ended 30 July 2023. 19 May 2024 - PAYE and NIC deductions
- Payrolling employee expenses and benefits
18/04/2024 - More...
Employers can register on a voluntary basis (before the start of the tax year) to report and account for tax on certain
- Changes to Scottish Income Tax rates 2024-25
18/04/2024 - More...
A reminder of the changes to Scottish Income Tax rates for the 2024-25 tax year. It was announced as part of the