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Part 4U.K.Property income

Chapter 6U.K.Commercial letting of furnished holiday accommodation

DefinitionU.K.

265Meaning of “commercial letting of furnished holiday accommodation”U.K.

(1)A letting is a lease or other arrangement under which a person is entitled to the use of accommodation.

(2)A letting of accommodation is commercial if the accommodation is let—

(a)on a commercial basis, and

(b)with a view to the realisation of profits.

(3)A letting is of furnished holiday accommodation if—

(a)the person entitled to the use of the accommodation is also entitled, in connection with that use, to the use of furniture, and

(b)the accommodation is qualifying holiday accommodation (see sections 267 and 268).

(4)This section applies for the purposes of this Chapter.

266Meaning of “relevant period” in sections 267 and 268U.K.

(1)For the purposes of sections 267 and 268 “the relevant period” for accommodation let by a company in an accounting period is determined as follows.

(2)If the accommodation was not let by the company as furnished accommodation in the 12 months immediately before the accounting period, “the relevant period” is 12 months beginning with the first day in the accounting period on which it is let by the company as furnished accommodation.

(3)If the accommodation—

(a)was let by the company as furnished accommodation in the 12 months immediately before the accounting period, but

(b)is not let by the company as furnished accommodation in the 12 months immediately after the accounting period,

“the relevant period” is 12 months ending with the last day in the accounting period on which it is let by the company as furnished accommodation.

(4)Otherwise “the relevant period” is the period of 12 months ending with the last day of the accounting period.

267Meaning of “qualifying holiday accommodation”U.K.

(1)Accommodation which is let by a company during an accounting period is “qualifying holiday accommodation” for the accounting period if the availability, letting and pattern of occupation conditions are met.

(2)The availability condition is that, during the relevant period, the accommodation is available for commercial letting as holiday accommodation to the public generally for at least [F1210 days].

(3)The letting condition is that, during the relevant period, the accommodation is commercially let as holiday accommodation to members of the public for at least [F2105 days].

(4)For the purposes of the letting condition, a letting of accommodation for a period of longer-term occupation (see subsection (6)) is not a letting of it as holiday accommodation.

(5)The pattern of occupation condition is that, during the relevant period, not more than 155 days fall during periods of longer-term occupation.

(6)For the purposes of this section a “period of longer-term occupation” is a continuous period of more than 31 days during which the accommodation is in the same occupation otherwise than because of circumstances that are not normal.

Textual Amendments

F1Words in s. 267(2) substituted (19.7.2011) (with effect in accordance with Sch. 14 para. 10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 7(3)(a)

F2Words in s. 267(3) substituted (19.7.2011) (with effect in accordance with Sch. 14 para. 10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 7(3)(b)

268Under-used holiday accommodation: averaging electionsU.K.

(1)This section applies if during an accounting period a company lets both—

(a)qualifying holiday accommodation, and

(b)accommodation that would be qualifying holiday accommodation if the letting condition (see section 267(3)) were met in relation to it (“under-used accommodation”).

(2)The company may make an election for the accounting period specifying—

(a)the qualifying holiday accommodation, and

(b)any or all of the under-used accommodation.

(3)The under-used accommodation so specified is treated as qualifying holiday accommodation for the accounting period if the average of the number of let days for the accounting period of all the accommodation specified in the election is at least [F3105].

(4)“The number of let days” for an accounting period of any accommodation is the number of days during the relevant period for which it is commercially let by the company as holiday accommodation to members of the public.

(5)Qualifying holiday accommodation may not be specified in more than one election for an accounting period.

(6)An election for an accounting period must be made within the period of two years beginning at the end of the accounting period.

[F4(7)This section is to apply separately in relation to accommodation in the United Kingdom and accommodation in EEA states other than the United Kingdom.]

Textual Amendments

F3Word in s. 268(3) substituted (19.7.2011) (with effect in accordance with Sch. 14 para. 10 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 7(4)(a)

F4S. 268(7) inserted (19.7.2011) (with effect in accordance with Sch. 14 para. 9 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 7(4)(b)

[F5268AUnder-used holiday accommodation: letting condition not metU.K.

(1)This section applies if—

(a)during an accounting period a company lets qualifying holiday accommodation,

(b)the accommodation is let by the company—

(i)during the next accounting period, or

(ii)during the next two accounting periods,

(c)the accommodation would (apart from this section) not be qualifying holiday accommodation—

(i)during the accounting period mentioned in paragraph (b)(i), or

(ii)during both of the accounting periods mentioned in paragraph (b)(ii),

only because of a failure to meet the letting condition (see section 267(3)), and

(d)there was a genuine intention to meet the letting condition for the period within subsection (1)(c)(i) or each of the periods within subsection (1)(c)(ii) (as the case may be).

(2)If the company makes an election in respect of that accommodation for any accounting period in respect of which the failure mentioned in subsection (1)(c) occurs, the accommodation is to be treated as qualifying holiday accommodation for that accounting period.

(3)Subsection (2) does not apply for the purposes of section 268 or subsection (1)(a).

(4)If an election is not made for the first of the accounting periods within subsection (1)(c)(ii), an election may not be made for the second.

(5)An election for an accounting period must be made within the period of two years beginning at the end of the accounting period.

(6)References in subsection (1)(a) and (c) to qualifying holiday accommodation include accommodation treated as such under section 268.]

Textual Amendments

F5S. 268A inserted (19.7.2011) (with effect in accordance with Sch. 14 para. 11 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 7(5)