What Qualifies as Furnished Holiday Accommodation Letting?
- The property must be furnished and let on a COMMERCIAL BASIS with the intention of making a PROFIT.
- The property must be AVAILABLE to let for at least 210 DAYS in the tax year.
- The property must ACTUALLY BE LET for at least 105 DAYS in the tax year.
- Periods of LONG LETTING must not exceed 155 DAYS in the tax year.
Note: LONG LETTING occurs if one person occupies the property for more than 31 consecutive days.
What are the Implications of Being Assessed as Furnished Holiday Accommodation?
The property letting is treated as if it were a trade and CAPITAL ALLOWANCES are available on furniture. So, you don’t need to wait for REPLACEMENT FURNITURE RELIEF.
Deduction of FINANCE EXPENSES are available. Unlike the new rules disallowing the deduction of finance expenses on rental property, which now only allow tax relief as a tax reducer at the basic rate.
Income qualifies as RELEVANT EARNINGS for tax relief on PENSIONS.
ROLLOVER RELIEF, GIFT RELIEF and BUSINESS ASSET DISPOSAL RELIEF (BADR) are available.
How are Losses Treated?
Losses can only be carried forward against future profits from Furnished Holiday Accommodation Income.
This is why Furnished Holiday Accommodation Income is separated out from Property Income on the Income Tax Computation.