Budget June 2010 - furnished holiday lettings rules

Tuesday 22 June 2010

The furnished holiday lettings rules (FHL) will not be withdrawn from 6 April 2010 (1 April 2010 for companies).

Since 22 April 2009 (Budget 2009), HM Revenue & Customs (HMRC) has applied the current FHL rules to UK taxpayers with qualifying holiday lettings situated elsewhere in the European Economic Area (EEA). Such businesses can currently choose whether to be taxed under the FHL rules or under the normal rules for property businesses. These arrangements will continue to apply for the tax year 2010-11.

The Government will publish a public consultation over the summer about plans to change the tax treatment of furnished holiday lettings from April 2011. The consultation will specifically look at a proposal which would:

  • ensure the FHL rules apply equally to properties in the EEA;
  • increase the number of days that qualifying properties have to be available for, and actually let as, commercial holiday letting; and
  • change the way in which FHL loss relief is given.

Full details about the proposed changes will be published over the summer.

Draft legislation will be published in the autumn, with a view to inclusion within Finance Bill 2011.

Further information:

Furnished Holiday Lettings - Questions and Answers