Recently advertised my holiday accommodation to be available for Free for Key Workers and the offer was taken within a day. Donna (name changed), a clinician in the NHS, moved in Monday 30th March. It only occured to me yesterday to question whether the 31-day continuous letting rule would apply if Donna stayed for more than 31 days given that I think her requirement may extend this due to the ongoing Covid-19 challenges? Morally I don't think HMRC would have a leg to stand on if she did but unfortunatley HMRC don't make rules based on morality so I'd like any advice on where you think it would stand legally / within the FHL rules?
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That is not exactly how the test applies. Also, there is a reference to exceptional circumstances (or some such) that may come into play.
Suggest you read the HMRC guidance around PIM4110.
If you read s325, there are 4 period lengths referred to, 210 and 105 days and 155 and 31 days.
It is hardly surprising that the first and third period limits together total 365 days.
The 155 days refers to longer term letting. So, you could let the property for periods over 31 days as long as they don't total more than 155 days in the relevant period. These longer term periods do not count as "allowable" (for want of a better term). But there is the "exceptional circumstance" get-out that could cause one or more such period to be"allowable".
There would remain 210 days and if the property was let as FHL for 105 days in that period, it would still qualify.
Whether this occupation would or would not fall foul of the legislation as it is, I would have no hesitation in disregarding the continuous occupation or any other way in which this impacted your furnished holiday let status, filing the tax return as normal with a note in the whitespace, and arguing with HMRC should they say otherwise.
These are extraordinary times ©lionofludesch
I suspect we will all be asking questions about the legislation and exceptional circustances not only FHL.
Reading this question I did wonder if it is a let if no rent paid or just a period.
Unless the rules are relaxed, I think you could fail on the 'let commercially' condition. HMRC helpsheet HS253 explains further: https://www.gov.uk/government/publications/furnished-holiday-lettings-hs...
I guess the problem for all owners of furnished holiday lettings will be the 105 day rule, given that nobody can travel either within, or without, the country. I know of countless future bookings for FHLs that have been cancelled already, and if it is primarily a summer season let, there will be no chance of achieving 105 days this year