Short Term Lets

Unless the income meets the Furnished Holiday Accommodation (FHA) criteria, short-term property rentals are usually seen as ordinary rental income.

To qualify as an FHA, your property must be:

• In the UK or the European Economic Area (EAA) – the EAA includes Norway, Iceland and Lichtenstein
• Furnished – there must be sufficient furniture provided for usual occupation and your visitors must be allowed to use the furniture

The property must be commercially let with the intention to make a profit from the income. If the property is let out of season to cover costs, but no profit is made, it will still be seen as commercial.

Accommodation can only qualify as an FHA if it passes all three occupancy conditions: the availability condition, the letting condition and the pattern of occupancy condition.

Please visit the Churchill Knight guide on Furnished Holiday Lettings (FHL) for more information. Further information is also available on the government’s website.

You may also be liable for the following taxes:

• Council tax is levied on properties, and the rates will vary based on your property area and size. However, you could qualify for a 50% discount for FHA properties, but you will need to apply for this directly with the local council.
• Capital Gains Tax is due when you dispose of the property. However, you could benefit from tax relief for selling your primary home.
• If you are a non-resident and you are selling a UK property, you must submit a separate non-resident capital gains tax return within 30 days of completion of the sale. Payment is also due within 30 days of completion. However, if you are filing a standard UK tax return, payment can be deferred until the normal deadline of 31 January.
• Standard VAT rules will apply if you are letting short term accommodations such as on Airbnb. You must also register for VAT and charge VAT from customers if your total threshold goes above the mandatory VAT registration limits.