Furnished holiday lettings changes explained
The legislation to amend the Furnished Holiday Letting (FHL) legislation is introduced by section 52 and Schedule 14 of FA 2011. As the rules finally reach the statute book, Rebecca Benneyworth offers a summary of advantages and traps they bring.
The outline characteristics of the Furnished Holiday Letting (FHL) rule reforms to bring the UK in line with European law have not changed through the tortuous formulation process that has taken more than two years. Some aspects of the favourable tax regime applying to FHL activities are retained, but new more restrictive conditions and amended loss relief provisions make the regime considerably less generous. Here is an overview of themain changes that are now in place:
- Extension to EEA activities
- Qualifying periods
- Period of grace
- Loss relief
- Capital allowances