Consultation on Proposals to Change the Tax Rules Relating to Furnished Holiday Lets
The HM Treasury was consulting on proposed changes to the tax rules for Furnished Holiday Lettings. The closing date for comments was 22nd October 2010.
Following the announcement, in the March 2010 Budget, that the Furnished Holiday Lettings Rules would not be repealed from April 2010, the Government had issued a new consultation amending, instead of repealing, the FHL Rules to ensure that the tax rules were fully compliant with EU law and were better targeted at businesses that were run commercially for profit rather than personal use.
The Government was proposing to change the rules so that -
- Furnished holiday lettings in both the UK and EEA were eligible to qualify as qualified furnished holiday lettings within the special tax rules
- Increase the minimum period over which a qualifying property was available to let to the public during a year from 140 to 210 days;
- Increase the minimum period over which a qualifying property was actually let to the public during a year from 70 days to 105 days;
- Restrict the use of loss relief from furnished holiday lettings so it could only be set against certain income from the same business.
There were no amendments to the longer term letting criteria ie. the property could not be let to the same person continuously for more than 31 days
Changes made to the FHL Rules would be implemented on the 1st April 2011.
