Furnished Holiday Letting (FHL)

Capital allowances are not typically available on residential properties. However you can claim capital allowances within a qualifying Furnished Holiday Letting (FHL). There is a specific list of tests to be met in order for a property to be classified as FHL.

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We recently completed a capital allowances claim for an individual client who acquired a property for £750,000 and operated as an Airbnb. The property was previously used by the seller as his own house. We have carried out a historical search and established the client’s entitlement to claim. As a result, the client has benefitted from a full unrestricted claim with total allowances identified of c. £150,000, which lead to tax savings of £28,500.

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The client has subsequently refurbished the property for £80,000, such as upgrade of the security systems and installation of air conditioning units, etc. We have identified further capital allowances of c.£60,000, which saved the client an additional tax saving of £11.400.

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Conditions: 

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• Contains basic furniture

• Let commercially for more than 105 days a year

• Available for commercial letting 210 days a year

• Not let to same entity for more than 31 days

• Owned personally or in a limited company

• Tax is paid by you in the UK on this letting income

• Located in the UK or another country within the European Economic Area (EEA)