Furnished Holiday Lets – tax advantages
There are various tax advantages to a letting being a Furnished Holiday Let (FHL) compared to any other let. A furnished holiday let is treated by HMRC as a business whereas any other let is seen as an investment.
Furnished holiday lettings businesses qualify for capital allowances when equipment used In the course of that business is acquired. Such costs benefit from the100% write off under the Annual Investment Allowance rules. For a FHL tax relief is available for replacing assets and the initial furnishing of the holiday property. There is no such tax relief for equipment for any other letting.