2 holiday lets one is FHL one isn't

2 holiday lets one meets criteria as a FHL one doesn't - capital allowances

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Client has 2 holiday lets both part of one out building in their garden. The building was converted into 2 lets at the same time as part of one project.

In the first year (2019) neither unit got anywhere near the 105 day occupance threshold to qualify as a FHL.

However last year they had a bit of a run on one of the units (not a 30 continual let or anything like that) and preparing their tax return I see that this one unit has achieved 112 days let. The other one was only let for 68 days.

Last yeat (2019) they were both assessed as L&P income so no capital allowances were available. However now that one unit has qualified as a FHL this year (2020) can 50% (ie for one of the two units) of the available capital allowances be claimed in 2020 against the income for that unit. Can AIA be claimed on that unit as the assets (furnishings, fittings etc) were brought in to the FHL business for the first time in 2020?

 

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Scooby
By gainsborough
06th Jan 2021 17:04

It seems I have spent a lot of time looking at FHLs in the last 2 days :). The short answer is yes - this previous thread should help https://www.accountingweb.co.uk/any-answers/furniture-holiday-let-capita... (ignore the out of date W&T mention).

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