I've never really had much to do with Furnished Holiday Lets (FHL'S), but as the allowable element of mortgage interest is reduced on buy to let properties I suspect I will see a few more.
A client has just told me they have invested in a FHL and are now concerned about the letting condition. The condition per the ITTOIA is "...the accommodation is commercially let as holiday accommodation to members of the public for at least 105 days."
In the first 12 months they are currently expecting short commercial lets to come to 82 nights, somewhat short of the 105 days. However, depending on your interepretation of the word day, they could be considerably closer to the 105 day requirement.
So the question is, what is a day? I can't see that the legislation has defined this and I can't find reference to this any where else. So is it:
- day = nights let;
- day = 24 hours;
- day = any day which has been partly let (ie a 2 night stay = 3 days);
- day = something else.
My thinking is that:
- No. 1 can't be right otherwise it would specify nights, however holiday accomodation is normally sold by the number of nights so maybe that's what was intended
- No. 2 would be too onerous to calculate, so unlikely the correct answer
- No. 3 sounds plausible but HMRC would probably prefer option 1
Any experience you can share or relevant case law you are aware of would be greatly appreciated.