June Budget – Furnished holiday lettings
The Chancellor has announced that the planned withdrawal of the furnished holiday letting (FHL) rules on 6 April 2010 has been cancelled! For the tax year 2010-11 the legislation will continue as before with all its tax advantages intact.
However, the Government is to publish a consultation document over the summer about plans to change the tax treatment of furnished holiday let property from April 2011. The consultation will look at issues to:
- Ensure the FHL rules apply equally to properties wherever they are 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.
HMRC will publish draft legislation in the autumn with a view to inclusion within Finance Bill 2011.
HMRC have also published a Q&A guide to answer questions relating to the cancellation of the planned withdrawal of the furnished holiday letting.