Introduction to this document

Election for a period of grace to apply to FHLs

Where you own a property which you let furnished as holiday accommodation it can qualify for preferential tax treatment where various conditions are met.

When can you use the election?

To count as an FLH the property must during a twelve-month period:

  • have been available for letting to the public for 210 days; and
  • actually be let for at least 105 days; and must not
  • have been let for long-term periods exceeding 155 days. To work this out you need to add together any periods where the property was occupied by the same tenant for more than 31 consecutive days. But you can exclude any periods you occupy the property. This means you can live in it during the winter months without jeopardising your relief.

Where the conditions are not met for a year a period of grace election allows you to treat it as a qualifying year where you genuinely intended to meet the occupancy threshold, but were unable to. An election can only be made where in the year before the first year you want it to apply the property reached the occupancy threshold.

If, in the following year, the property still doesn’t meet the occupancy threshold, as long as an election has been made for the earlier year, that year can also be treated as qualifying.

How to make the election

The election can be made by entering “X” in the appropriate box on the UK property pages of your self-assessment tax return. You can also make an election by sending it in writing to reach HMRC by no later than the 31 January following the end of the tax year for which it is to apply.