Recent news
Furnished Holiday Lettings (FHL)
The response to the FHL consultation was published in December 2010. As a reminder the current rules for FHL are set out below:
- The property must be in the UK or within the European Economic Area (EEA),
- The property must be available to let to members of the public for at least 140 days a year on a commercial basis,
- The property must actually be let to the public for at least 70 days,
- Losses from an FHL business can be set against general income.
From April 2011 the following changes will apply. Detailed legislation will be published in Finance Bill 2011:
- Effective from April 2012, the minimum period over which a qualifying property is available to let to the public during a year will increase from 140 to 210 days,
- Effective from April 2012, the minimum period over which a qualifying property is actually let to the public during a year will increase from 70 days to 105 days,
- The use of loss relief from FHL will be restricted so it can only be set against income from the same FHL business,
- A “period of grace” will be introduced to allow businesses that don’t continue to meet the “actually let” requirement for one or two years to elect to continue to qualify throughout that period.
Example
Typically the level of plant and machinery allowances is between 10% - 30% of the purchase price
On a £300,000 purchase of a holiday home, the available allowances may be up to £90,000. This will flow through to a total tax saving over time of up to £45,000 based upon an income tax rate of 50%.
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