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Tax - availability condition qualification and Covid

 
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BigM



Joined: 15 Apr 2015
Posts: 8
Location: Devon

PostPosted: Mon Jul 19, 2021 1:47 pm    Post subject: Tax - availability condition qualification and Covid Reply with quote

Not sure if I have posted this in the right subset, however, many might be wondering how the Gov will deal with the requirement for the holiday let availability condition in light of Covid, in that the property has to be available for 210 days. I have found this quote from HMRC buried in the internet.

"HMRC's position is that the availability condition is satisfied if the person has made the property available for letting as a furnished holiday accommodation for at least 210 days in the year. We have taken the view that as long as the person had made it available for 210 days, even if Covid restrictions meant that in reality the property could not be used, the person has satisfied the test.

For example, if you had a holiday let and had it advertised on a booking platform for 210+ days and covid restrictions/travel bans meant that in reality people could only book it for 190 days, and you only let it for 70 days, then as long as you were a FHL or had a period of grace election the previous year then you would still qualify as an FHL.

Of course if you took the opportunity of cancelled bookings to renovate the property such that you could not advertise it as available for 210+ days then you would not qualify.

The period of grace election has specific conditions, that relate solely to the letting condition (the property must be let commercially as a furnished holiday accommodation to the public for at least 105 days in the year). Where Covid restrictions affect a person's ability to satisfy this condition, those factors are considered unforseen circumstances and so a period of grace election (POGE) would be allowed. But the conditions include that a POGE can only be made following a qualifying year, or following a POGE, with a maximum of 2 POGE's. So where someone had set up as a potential FHL but Covid affected them in their first year then a POGE is not available. This fits with the Government's response in other areas, where the measures were put in place to maintain status rather than grant a status that there was no evidence for before."

Link here
https://community.hmrc.gov.uk/forums/customerforums/ifp/78a3aa22-589e-ea11-8b71-00155d977d2f?msCorrelationId=abefaf55-666c-4c66-a82a-1766f6b44cda&instanceId=a597504d04a4bb873c98faa2436077bc03bc8fb1fd56c877805eb305ea4ce58e&tenantId=ac52f73c-fd1a-4a9a-8e7a-4a248f3139e1&portalId=e1cfc2ea-2de6-4c96-8e99-76600a349358&orgId=13212d7e-6a5d-4598-95ba-4a07545dbb67&environmentId=302efd07-28d9-4d2d-b558-96167951ad6a&portalApp=site-e1cfc2ea-2de6-4c96-8e99-76600a349358-UKw&portalType=Community%20Forums&portalProductionOrTrialType=Production&licenseType=Dynamics365&portalDomain=https%3A%2F%2Fcommunity-origin.hmrc.gov.uk&page=2
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Joanna



Joined: 23 Aug 2007
Posts: 1054
Location: Chester, North West England & Sidmouth, East Devon

PostPosted: Tue Jul 20, 2021 2:49 pm    Post subject: Reply with quote

Thanks, that's more or less what I was hoping they would say.
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Jo

Joint owner of Baker's Cottage in Chester & Chandler's Cottage in Sidmouth
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SusanMay



Joined: 29 Jan 2012
Posts: 110
Location: Dorset

PostPosted: Tue Jul 20, 2021 5:02 pm    Post subject: Reply with quote

Bit unsure here...

Am I right in thinking that this means

(a) Our FHLs donít need to have been actually available for letting for 210 days in the tax year 2020 - 2021, as long as they would have been available that many days if we hadnít had the Covid restrictions, but,

(b) if we didnít let the property for at least 105 days (so the actual occupancy), we need to make a period of grace election?
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