I have a family who's parents have put their former substantial residence into a bare trust to the benefit of their children.
I prepare the trust accounts. Part of the residence is let out as a FHL and skirts around the 105 day mark occupancy as its a large property and only really suitable for family gatherings, so tends to be 1 week max, or long weekends.
When the parents (resident elsewhere) are in the country, they sometimes use the FHL and pay rent, but not a huge sum. They sometimes use another property owned by one of the children.
The family claim it is market rent as its only used if not already let so a "last minute" rent. I am not convinced, as they seem to stay for 2-3 weeks for the same money as received in a long weekend to joe public.
I am minded to exclude the parents period of occupation on two grounds (a) they are not really "members of the public" but the owners parents., and (b) its probably not commercial. Either leg would mean it is not a FHL, which is possibly a blessing as they have further rentals within the trust which have losses in some periods.
[IHT I appreciate is another issue if they are not paying market rents due to reservation of benefit, leave that one for now]