FHL and BATR

[Flash]

Please can someone clarify for me whether an FHL (Furnished Holiday Let) qualifies for Business Asset Taper Relief?

Apologies if it is a stupid question, but I have seen conflicting advice in books and on the Internet.

Thank you very much for your time.

[al_eebee]

A qualifying FHL will qualify for BATR it just has to meet the income tax criteria, which may or may not present problems hitting the targets each year.

[maths]

Yes.

See section 241 TCGA 1992.

[Flash]

I thought it did, however I have recently had some conflicting advice, which I have pasted below:

"When an individual owns a property and is letting it as a furnished letting you
would think that it is a business asset as they are liable for tax on the
income - but - this is one area where the rules work both ways in HMRC's
favour.
The asset is counted as a personal asset - no business taper relief, so
you go back to the less generous relief as it counts as a personal asset
for this purpose."

I also looked in S241 TCGA and it talks about "commercial Letting of FHL" and "Trade".

I have a feeling that in order to demonstrate a trade the owner needs to provide a service, such as in a hotel, like B&B? As the Flat is in Cornwall, it seems unlikely that the owner is going to nip down and cook the occupants some breakfast.

This is where I am getting a bit confused. I would be grateful for any further clarification. Thanks.

[Lee Young]

Flash

The text you quote does not mention a furnished holiday let but a "furnished letting". The distinction is important - furnished lettings are not business assets for CGT taper relief purposes, whereas a furnished holiday let is (if it satifies the test in s241 mentioned by maths above)

[Flash]

Thanks I will clarify that point with the person who wrote it.