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FHL - failing the days let test

Furnished Holiday lets - how to tax the income if it consistently fails the 105 days let test?

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I wonder if someone can help, I have a client with a mix of property one BTL, one commercial and one FHL.  Although the FHL has been available to let for the 210 days, it is consistently failing the 105 days let test.  All lets are on commerical terms, however the property is used for about 8 wks each year by the owners.  If this continues I assume I would just treat it as a normal BTL?  It's just that the repairs and running costs of the FHL property are very high so offseting all those costs against his other rentals would wipe out their profits.

I know that not meeting the critera will also effect the business rate of the property as well.

Any help greatly received.

Replies (6)

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By Tax Dragon
17th Jan 2020 12:01

Private use adjustments?

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By VCM Accountants
17th Jan 2020 12:45

Thanks for your speedy reply, yes I am planning on restricting the general overheads of mort, rates etc for private useage. I just wondered if it would still be reported as a FHL or be pooled with the other income from land and property?

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Replying to VCM Accountants:
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By Tax Dragon
17th Jan 2020 13:00

It's not an FHL if it doesn't meet the conditions to be an FHL. Sounds like period of grace etc ain't in point either.

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By Tax Dragon
17th Jan 2020 13:02

Is the 'FHL' commercial?

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By Richard Grant
17th Jan 2020 13:24

Surely you want to offset the losses against the BTL profits, why shelter the losses and pay tax on the BTL?

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Replying to Richard Grant:
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By Tax Dragon
17th Jan 2020 13:38

I think they do.

Just making sure they could.

FHL is not a bar. The PUA and commerciality points may be.

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