Furnished Holiday Lettings Abroad

Assuming you satisfy the criteria for your property to be classified as a Furnished Holiday Let (FHL) then the change in the rules will allow favourable tax treatment for any losses on income and any gains you make on the sale of the property.

To qualify as a FHL, the property must satisfy 3 conditions. These are:

1) The property must be available for commercial letting to the public for 140 days in the tax year.

2) The property must be occupied for at least 70 days.

3) It must not be let to the same person for a continous period of more than 31 days. 

The Budget 2009 explained that current UK law allowing only UK properties to benefit from these rules contradicts European law. As a result the HMRC will abolish the FHL rules in April 2010, but in the meantime properties within the European Economic Area (EEA) will come within the regime.

Therefore, assuming your property satisfies the 3 tests above you can apply FHL treatment to your property for the 2007/08, 2008/09 and 2009/10 tax years.  

It is also possible to make retrospective claims for FHL treatment in the 2006/07 tax year, although the deadline set by HMRC to accept these amendments is 31^st July 2009, so you must act quickly. If you feel you may benefit from this change, you should contact your nearest TaxAssist Accountant.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.