PROMOTION Furnished holiday let rules Does your holiday home still meet the criteria? fyou own a holiday home in the UK that qualifies as a furnished holiday let, you might have been using it more yourself last year and possibly again this year, especially with the ability to then the FHL status is immediately lost." As the last financial year has seen an unprecedented financial upheaval for many individuals and business owners, be considered alongside all of your other income and assets. It isalso important to be proactive if your overall personal income for the tax year to 5 April 2021 is lower than the previous year (before the pandemic hit), as you might be able to reduce the self- assessment payment due on 31 July 2021 If you complete your self-assessment form now. Do not leave it until 31 January 2022! If you don't take the right action now and you lose the furnished holiday let status of your property, then any income carned from renting it out will be treated as normal rental income and will be it is important to act quickly and to take advice on what the options are available to you and your unique situation. Also, consider what evidence might be required by HMRC in the future to prove what your intentions were during the pandemic, especially in relation to the property being available to be let for 210 days. If you would like to discuss the implications covered in this article, please don't hesitate to get in touch. work from home and the restrictions on overseas travel. It is important however to understand the implications this may have for your tax planning, both now and in the future. Owners of furnished holiday lets who were unable to reach the required 210 days availability to the public and let for 105 days requirements (which excludes periods of 31 days or longer to the same person) in the tax year April 2020-April 2021, should act now to ensure they don't lose the tax benefits for furnished taxed alongside your other income. You also won't be able to claim other valuable tax reliefs such as capital allowances, mortgage interest relief or advantageous capital gains tax reliefs if the property Is sold. You also need to consider for the holiday lets. There are a couple of options available to people in this position, firstly it is possible to make a period of grace election, so if you don't meet the requirements in that individual tax year, longer term if you plan to sell the property or pass it on to the next generation. HMRC are reported to be taking a tough line on furnished holiday lets, despite all the difficulties of the pandemic and a recent note on the HMRC blog said: "There is no COVID relaxation in relation to the availability condition for furnished holiday lets. If the property is not available for 210 days, Stephen Metcalf is a private client tax senior manager at Kreston Reeves. 0330 124 1399 it won't affect the position for future years, (provided there was a genuine intention to meet the letting condition). The second option is to average the number of days let over a three-year period. Both scenarios have pros and cons and you stephen.metcalfekrestonreeves.com KRESTON REEVES are advised to take tax advice so this can Kreston Reeves has offices in Brighton, Chichester, Horsham, Worthing, London and Kent www.krestonreeves.com PROMOTION Furnished holiday let rules Does your holiday home still meet the criteria? fyou own a holiday home in the UK that qualifies as a furnished holiday let, you might have been using it more yourself last year and possibly again this year, especially with the ability to then the FHL status is immediately lost." As the last financial year has seen an unprecedented financial upheaval for many individuals and business owners, be considered alongside all of your other income and assets. It isalso important to be proactive if your overall personal income for the tax year to 5 April 2021 is lower than the previous year (before the pandemic hit), as you might be able to reduce the self- assessment payment due on 31 July 2021 If you complete your self-assessment form now. Do not leave it until 31 January 2022! If you don't take the right action now and you lose the furnished holiday let status of your property, then any income carned from renting it out will be treated as normal rental income and will be it is important to act quickly and to take advice on what the options are available to you and your unique situation. Also, consider what evidence might be required by HMRC in the future to prove what your intentions were during the pandemic, especially in relation to the property being available to be let for 210 days. If you would like to discuss the implications covered in this article, please don't hesitate to get in touch. work from home and the restrictions on overseas travel. It is important however to understand the implications this may have for your tax planning, both now and in the future. Owners of furnished holiday lets who were unable to reach the required 210 days availability to the public and let for 105 days requirements (which excludes periods of 31 days or longer to the same person) in the tax year April 2020-April 2021, should act now to ensure they don't lose the tax benefits for furnished taxed alongside your other income. You also won't be able to claim other valuable tax reliefs such as capital allowances, mortgage interest relief or advantageous capital gains tax reliefs if the property Is sold. You also need to consider for the holiday lets. There are a couple of options available to people in this position, firstly it is possible to make a period of grace election, so if you don't meet the requirements in that individual tax year, longer term if you plan to sell the property or pass it on to the next generation. HMRC are reported to be taking a tough line on furnished holiday lets, despite all the difficulties of the pandemic and a recent note on the HMRC blog said: "There is no COVID relaxation in relation to the availability condition for furnished holiday lets. If the property is not available for 210 days, Stephen Metcalf is a private client tax senior manager at Kreston Reeves. 0330 124 1399 it won't affect the position for future years, (provided there was a genuine intention to meet the letting condition). The second option is to average the number of days let over a three-year period. Both scenarios have pros and cons and you stephen.metcalfekrestonreeves.com KRESTON REEVES are advised to take tax advice so this can Kreston Reeves has offices in Brighton, Chichester, Horsham, Worthing, London and Kent www.krestonreeves.com