Furnished holiday lettings

Furnished holiday lettings (FHL) are treated more advantageously for tax purposes than other property lettings.

The benefits • Capital allowances are available on furniture, furnishings, etc. in the let property, as well as on plant and machinery used outside the property (such as vans and tools)

• Certain capital gains reliefs are available as if the activity were a trade, for example rollover relief on the replacement of business assets and the entrepreneurs’ relief that charges gains on certain business disposals at a reduced 10% rate

• The income counts as earnings in calculating the maximum pension contributions that may be paid to a registered scheme

• 100% business property relief (BPR) may be available for inheritance tax purposes where services are offered to holidaymakers.

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