Furnished Holiday Lets

Allowable expenditure for FHL's

Didn't find your answer?

Property let from 1/3/17 - intention is that it will fulfill occupancy rules to be let as a Furnished Holiday let in future. Can it be treated as such in 16/17 even though it has not been let for 12 months at that point ? 

If so, I assume capital allowances can be claimed on all equipment, furniture, fixtures & fittings in 16/17 for use within FHL ?

Will pre-trading expenditure such as crockery, furnishings, bed linen, "bits and bobs" etc etc all be an allowable deduction against rental income on "wholly. neccesarily and exclusively" criteria or is this disallowabale as it all relates to initial set up cost of FHL ?

Many thanks in advance for any guidance on this.

Replies (3)

Please login or register to join the discussion.

By michaelblake
01st Aug 2017 16:16

The helpsheet HS253 notes that you must apply the occupancy tests to the first 12 months of trading


Thanks (1)
By michaelblake
01st Aug 2017 16:24

If the qualifying condition are met for the first 12 months then the activity is treated as though it were a trade for income tax purposes and the normal pre-trading rules relating to business expenses will apply - see HMRC guidance at https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim46350

Thanks (1)
Replying to michaelblake:
By Windy
01st Aug 2017 16:27

Many thanks Michael. I will treat as a "normal" rental for 16/17 then and prepare an amended return and treat as a FHL once I know it qualifies after 12 months letting.

Thanks (0)