Qualifying for FHL

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Hello all

I’d appreciate some guidance on a couple of points, probably fairly easy questions for the more seasoned in this area, especially with the rise of Airbnb.

I have a client who “Airbnb’s” a small barn and a small log pod in the grounds of his main residence, he started the letting in the 2018/19 tax year. Individually the barn and pod do not meet the 105 day requirement, each are in the 80-90 day range for the first 12 months.

My first question is do they have to be treated separately, or can they be treated as one and therefore combine the number of days to reach the 105 days? PIM4110 distinguishes between different cottages but I feel this is different as its all on one estate. If they do have to be treated separately, it would make it fairly complicated if one meets the requirements and the other doesn’t as they are run as one business. 

Individually the barn and pod will both meet the FHL requirements for 2019/20, the only reason it didn’t for 2018/19 was because the business was being built. So looking at grace periods I read online that you can only elect if the accommodation met the requirements in the previous tax year, but looking at 326A I can’t see that? Although it is late and it has been a looong week.

On a different note, I can’t see how rent a room relief could be claimed for the barn, with a straight face at least, not really sure the pod can be called a separate residence but then again if caravan or houseboat is a separate residence, I guess a small pod could be..

If you have any guidance or cases which would help it would be appreciated.


Replies (4)

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By Tax Dragon
04th Jan 2020 08:41

Pretty sure all these issues have been discussed in here before. And not that long ago. Have you tried a search?

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Replying to Tax Dragon:
By Slim
04th Jan 2020 10:31

I did search, can’t see the thread you refer to though.

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Replying to Slim:
By Tax Dragon
04th Jan 2020 19:15

It doesn't help that people often use random titles for their questions, but you are lucky enough to have a question on a subject that provides some consistency in that regard - folk that have a question on FHL tend to refer to that in the title. So to see what came up I've just tried searching on "FHL" and saw a thread called "Furnished Holiday Lets and the 105 day requirement" in the first few hits.

I doubt it answers all your questions, but it might help.

Thanks (1)
By Slim
19th Jan 2020 20:22

To follow up on this.

The barn and pod are both on the clients estate, the whole site is considered one for planning and by the land registry.

The legislation refers to accommodation and the dictionary definition of accommodation does include a "group of rooms", therefore I am wondering if the barn and pod can be combined as a single accommodation when considering the number of letting days?

Not sure if I am over thinking this, any input would be appreciated.

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