Please help - my head is spinning!
client has an annexe in his house, which is part of the main house but can be separated if doors are locked etc. He has been renting this via airbnb, so all short term lets. Now I am happy that we can claim rent-a-room against this income, but can he also then claim that it is a furnished holiday let (subject to the usual rules on availablity etc)? I appreciate that this will make zero difference to the income tax due if we are runing with rent-a-room, but it may reduce a capital gains tax bill when he sells it (which I don't think he plans to any time soon). There is no space in the FHL section of the tax return to claim rent a room relief, although I fully appreciate that this in itself does not mean it is not available.
I know b&bs are allowed to claim rent a room relief, but I am thinking that if it qualifies as an FHL then this would somehow preclude it from being eligible for rent a room because it has to be letting out of part of his main home to qualify for R-a-R. If he decides it is an FHL, is he effectively locking that connecting door permanently which then means it is no longer part of his home....
I may be overthinking this - I would really welcome any helpful comments from anyone who has come across this before :)