NON-UK RESIDENTS FURNISHED HOLIDAY LETS​

Furnished Holiday Lets (or FHL’s) have grown in popularity in recent year with the rise of various booking websites such as Air B&B. An FHL is effectively a residential property which is supplied fully furnished and is available for short term letting periods, such as self-catering holidays or work accommodation away from home.​

There is a set of strict criteria which your property must fulfil to meet the conditions and be accepted as a qualifying FHL, but if you do manage to meet the requirements then you will receive advantageous tax treatment of your property investment.

The allowable expenses are quite different for FHL’s, and one huge benefit is that they do not suffer the mortgage interest restrictions that are imposed on all other non-qualifying residential properties.

One drawback of holiday let accommodation is that it can fall inside the remit of VAT if the gross rental receipts for your combined holiday letting business exceeds £85,000 per year. This is an important consideration and could prove very costly if you are not correctly registered for VAT at the appropriate time. As a Non-Resident property owner, you should ensure that a UK Agent manages your property, as otherwise you will need to register for VAT before you reach the £85k threshold.

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Owning a Furnished Holiday Let has many attractive perks from a tax perspective, and you can always look to convert an existing rental property into an FHL. Speak to a specialist today; we can help to guide you through the maze of this specialist area of rental taxation.

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