Holiday cottage booked for let for 115 days in 2012/13 however one person cancels at short notice for a 30 day let(loses 50% deposit) and landlord unable to re-let. Cottage qualifies as fhl in all other aspects. My concern is that cottage may now fail occupancy test for 2012/13. I.E ". The property must be commercially let for 105 days".
I would welcome any thoughts on this topic
Replies (3)
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Thoughts
Does the landlord have any other FHL properties so that an averaging election would be beneficial?Was the occupancy test met for the property in either of the previous two years?
I'd be inclined to elect...
... to protect the position.
If the letting was agreed and then cancelled, so that it was available for letting to someone else, then strictly it wasn't let.
Contrast that with the situation where someone lets it and just doesn't turn up, when it's still let, even though it's unoccupied.
The fact that with the cancelled let it would have qualified is clear indication that there was a genuine intention to meet the letting condition.
Treat it as qualifying and make a white space disclosure including an election under S. 326A. You don't lose anything by making the election; you simply put the matter beyond doubt.