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Where Taxpayers and Advisers Meet

Covid-19 and Pattern of Occupation

Learner77
Posts: 9
Joined: Fri Oct 12, 2018 4:59 pm

Covid-19 and Pattern of Occupation

Postby Learner77 » Wed Jul 01, 2020 12:01 pm

Hi everyone.

I own a holiday let property in Scotland which has obviously been "unavailable" for rent throughout the lockdown. In Scotland, holiday lets with separate access can open from 3 July. This means that from 6 April to 2 July inclusive, 88 days, the property has been unavailable for let. The Pattern of Occupation rule states that to qualify as an FHL a property must be available for at least 270 days in the year, meaning the maximum number of unavailable days is 95. I can't find any guidance on HMR&C's website as to whether this rule will be relaxed for 2020/21 due to Covid-19.

Going forward, for the remainder of 2020/21, I'm thinking of making the property unavailable for several days between lets to allow time for the increased cleaning procedures that will now be required. Clearly it won't take long for the number of unavailable days to exceed 95 if I have to include the 88 Covid-19 days in the total. This would mean that the property does not qualify as a holiday let for 2020/21 & would have to be classed as a residential let for that year, with tax implications.

Does anyone have any information/advice? Thanks in advance.

bd6759
Posts: 3168
Joined: Sat Feb 01, 2014 3:26 pm

Re: Covid-19 and Pattern of Occupation

Postby bd6759 » Wed Jul 01, 2020 5:02 pm

There is no need for any specific COVID relaxation. The existing legislation covers period where the letting conditions is not met in exceptional circumstances. The only criteria is that the other condition must be met, its only the 105 days condition that is missed.

Get factsheets HS253 (google it) and look for "Period of Grace". You can make the claim for 2 consecutive periods.

Learner77
Posts: 9
Joined: Fri Oct 12, 2018 4:59 pm

Re: Covid-19 and Pattern of Occupation

Postby Learner77 » Wed Jul 01, 2020 5:21 pm

Thanks for your reply but I'm not concerned about the the Letting Condition where the property must be actually let for at least 105 days. I'm talking about the Period of Availability. I think I might not have referred to it correctly in my original question but the fact I mentioned 270 days indicated that was what I was talking about. The property has to be "available" for rent for at least 270 days. According to HS253, the Period of Grace only applies where both the Pattern of Occupation & the Availability conditions are met. That's why I asked this question. What happens if the property is not available for rent for more than 270 days in 2020/21 because it was shut down for 88 days due to Covid-19?

bd6759
Posts: 3168
Joined: Sat Feb 01, 2014 3:26 pm

Re: Covid-19 and Pattern of Occupation

Postby bd6759 » Wed Jul 01, 2020 10:19 pm

Hi
Sorry. There is no definition of "available to let", but the object is the property, The law says: " The availability condition is that, during the relevant period, the accommodation is available for commercial letting as holiday accommodation to the public generally..."

I'd argue strongly that the accommodation is available, in the sense that it is empty and could receive visitors if circumstances allowed.. In my mind it is available but for the COVID restrictions.

HMRC may well issue guidance, but that isn't likely to be before March next year.

Learner77
Posts: 9
Joined: Fri Oct 12, 2018 4:59 pm

Re: Covid-19 and Pattern of Occupation

Postby Learner77 » Thu Jul 02, 2020 8:38 am

Thanks for getting back to me. It's an interesting point. As you say, presumably HMR&C will provide some advice at some stage, we'll just have to wait and see!


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