skip to navigationskip to main content

Phone: 01372 365 839 

Email:

Furnished Holiday Lettings Changes

Newsletter issue - January 2011.

Furnished holiday lettings have some specific tax advantages. On 9 December 2010 the Government released draft tax legislation that is expected to become law from April 2011. This draft law includes three major changes to the taxation of furnished holiday lettings.

  1. Separate FHL businesses. In April 2009 the Government announced the tax reliefs that apply to property let as furnished holiday accommodation (FHLs) in the UK, would also apply where the property was located in a European Economic Area (EEA) country. These EEA countries comprise all 27 EU member states plus Iceland, Liechtenstein and Norway. From 6 April 2011 (1 April 2011 for companies), the profit or loss from FHL property let in EEA countries other than the UK, must be calculated separately from the profit or loss arising from UK holiday lettings. Profits and losses from any other overseas lettings must also be calculated separately and not mixed with the FHL profit or loss.
  2. Restriction of loss relief. Losses made from FHL businesses after 5 April 2011, either in the UK or elsewhere, won't be available to set against your other income for the same tax year, or the previous tax year. The loss can only be set against future profits from the same FHL business (either UK or EEA based).
  3. Change to lettings condition. The periods a property must be let to qualify for the FHL tax reliefs are extended from 6 April 2012 (1 April 2012 for companies). The property must be let commercially as furnished holiday accommodation for 105 days per year (previously 70), and be available for letting for 210 days (up from 140). If you let a number of FHL properties you can average let days across all your FHL properties in the UK for a tax year. You can also average the let periods for all your other FHL properties located in other EEA countries.

Once a property qualifies as furnished holiday lettings, it may fail the letting condition for up to two years and continue to qualify, if you elect for the FHL tax status to apply.

Choosing a Service

Choosing an accountant that matches your needs

What Our Clients Say

Read the reviews from some of our satisfied clients

Free Initial Consultation

Understanding your accountancy requirements

Request a Callback

Lets talk at a more convenient time for you

Great reasons and promises we make to you which is why you should call us before deciding on your accountant.

Our Promises

We’re a dedicated team which strives to provide success to our clients in regards to all their accountancy needs.

Meet our team