Holiday Lettings

What accommodation can qualify as furnished holiday lettings?

To qualify as a furnished holiday letting the accommodation must meet all four of the following conditions :-

  • Must be furnished.
  • Must be available for letting to the public for at least 210 days for 2012/13 onwards, previously 140 days.
  • Must actually be let for at least  105 days for 2012/13 onwards, previously 70 days
  • Must not be let for periods of longer-term occupation for more than 155 days during the year.

Furnished Holiday Lettings

Profits from furnished holiday lettings are taxed as a trade for tax purposes and therefore have some tax advantages over other types of lettings.  Such as:-

  • Entitlement to capital allowances on furniture, furnishings, and white goods used in the letting property, as well as on plant and machinery used outside the property (such as vans and tools)
  • Capital Gains Tax  relief is available when the property is sold such as, business asset rollover relief, entrepreneurs’ relief, gift relief and relief for loans to traders.
  •  Profits count as earnings for pension purposes.

NB Sideways relief for losses against general income was abolished for 2011/12 onwards.

Renting a Room Relief

Profits from renting a room in your home to lodgers are normally exempt from tax if they are below £4,250.