Iain Rankin outlines the capital gains tax benefits available to qualifying furnished holiday lettings businesses.
Gradual restrictions in relief for finance costs (e.g. mortgage interest) have resulted in many landlords switching from long to short-term rentals.
With those restrictions in full effect, furnished holiday lettings (FHLs) have enjoyed increased popularity, but their potential for capital gains tax (CGT) relief is often overlooked.
Qualifying conditions
To qualify, some initial conditions must be met. Properties must be located within the UK or the European Economic Area and be commercially let with intent to generate profit. Furnishings should meet the standard for normal occupation.
HMRC enforces
