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).
