Hi all
The bare facts are as follows:
Client has residential properties which he lets out.
Client leases a block of holiday flats and seperate house (owners accommodation) which are on the same plot. (3 year lease)
I put it to the client that he may need change of use from council as the holiday flats are to be let long term as peoples residences.
Council informs client that no need to apply for change of use, but to retain a visitors book therefore the flats will still be FHLs.
My initial feelings are that the FHLs as they are still registered as such would require seperate disclosure as FHLs on my client's tax return, but the seperate house would be included in "normal" lettings.
I would appreciate.your thoughts
Many thanks
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Replies (10)
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People know my thoughts
Whether or not the council consider them to be holiday lets is utterly irrelevant, and you should not be charging money for completing people's tax returns.
There is a statutory definition of a furnished holiday letting for tax purposes in ITTOIA 2005, sections 323 to 326. Either the definition will be satisfied or it will not. You seem to be indicating that it will not.
Thanks
Thank you for the information.
Disappointed at your initial comment -surely it is better to ask and be corrected, and isn't that
one of the purposes of AccountingWeb.
Difficult to understand the question
Assuming that you are saying that the client owns several residential properties, amongst which there is a block of flats and a house all of which are being let out to the same tenants for 3 years, how could you possibly think that they qualify as furnished holiday lets for tax purposes?
Why would you take it upon yourself as an accountanr to advise the client to apply to the local council for change of use? What change is there from residential to residential? The hearsay advice from the council to keep a visitors' book is farcical in the circumstances - to the point where one has to wonder what the client actually said to the council to prompt such a response.
In short, I agree completely with Portia.
The thing to do
Would be to read the weather-loving helpsheet! http://search2.hmrc.gov.uk/kb5/hmrc/forms/view.page?record=eivrfAKnP64&f...
Sorry if unclear
Thought OP was clear but apparently not so hopefully this will clarify and prove I'm neither an idiot nor unfit to do tax returns as mentioned by the Ninathen endorsed by Euan.
Quite simply, client has a number of residential lettable units.
Client then leased a block of holiday flats with owners accomodation which comprised a house on the same plot from a third party.
He has since rented dome out to individuals as their respective places of abode.
The question of change of use from the council was brought up because my client has tenants on benefits in other properties and I mentioned to him the possibility that as holiday flats he would not be able to consider benefit tenants( can't give short hold assured tenancy required for benefit claim and due to being Holiday lets are governed by similar rules for termination of let as hotels)
The change would not be residential to residential, but holiday accommodation to residential which is a change of use. Holiday accommodation is regulated in a similar way to HMO's by this Council.
So my only crime is to ask the question that as the leased property included a block of holiday flats, would this require them to be identified as such on my client's return.
I am now aware of the 31 day and 155 day rules for which I am grateful.
No
question that as the leased property included a block of holiday flats, would this require them to be identified as such on my client's return.
No, because they are not FHL's for tax purposes.
I would recommend re-reading the helpsheet as provided by Portia.
Well
if they haven't been occupied as holiday lets, they should not be disclosed as such on the Tax Return. It seems from what you say that those who occupy them do so full time, so they are not holiday lets.
Quite simply if the tenants have a 3 year lease it cannot possibly be FHL.
"The accommodation must not be let for periods of longer-term occupation for more than 155 days during the year." - from the help sheet provided by Portia. I really don't understand this question. The tenants are living there, it is their full time home. It is not a holiday home.
Ah yes but...
Quite simply if the tenants have a 3 year lease it cannot possibly be FHL.
"The accommodation must not be let for periods of longer-term occupation for more than 155 days during the year." - from the help sheet provided by Portia. I really don't understand this question. The tenants are living there, it is their full time home. It is not a holiday home.
...didn't someone at the council say they could be classed as FHL if a visitors book was signed. You couldn't make it up -
could you?
I giggled
Quite simply if the tenants have a 3 year lease it cannot possibly be FHL.
"The accommodation must not be let for periods of longer-term occupation for more than 155 days during the year." - from the help sheet provided by Portia. I really don't understand this question. The tenants are living there, it is their full time home. It is not a holiday home.
...didn't someone at the council say they could be classed as FHL if a visitors book was signed. You couldn't make it up -
could you?
The council is always right ;)