Furnished holiday lettings (FHLs) have a number of tax advantages over residential lets. These advantages include the opportunity to benefit from a number of capital gains tax reliefs.
The capital gains tax legislation treats the commercial letting of furnished holiday letting as a trade. This allows the FHL business access to certain reliefs which are available to traders.
FHLs
The business must qualify as an FHL to benefit from the reliefs. To do this, it must be a furnished property that is let commercially with a view to making a profit. In addition, it must pass the following occupancy conditions:
- Lettings exceeding 31 continuous days or more must not exceed a total of 155 days in the tax year.
- The property must be available for letting as furnished holiday accommodation for at least 210 days in the tax year.
- The property must be let commercially for at least 105 days in the tax year.
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