Sarah Bradford outlines the different tax rules that apply to traditional buy-to-lets and furnished holiday lettings, and what tests need to be met to access the furnished holiday lettings rules.
When it comes to the taxation of property income, from a tax perspective all lets are not equal. The tax rules that apply to landlords with traditional buy-to-let portfolios differ from those applying to landlords of furnished holiday lettings (FHLs). The latter offers some tax advantages not available to the former, but strict tests must be met in order to benefit from the tax rules for furnished holiday lettings.
This article looks at the different regimes. The rules for taxing property income of unincorporated businesses are found in ITTOIA 2005, Pt 3.
Concept of a property rental business
Where a landlord derives rental income from the letting of properties in
