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Posted Mon, 25 May 2020 07:19:57 GMT by Kevin Sowerby
New FHL began first year of operation with a booking in July 2019. Coronavirus and associated Government lockdown has led to cancellations and reduced demand during first 12 months of operation and as a result it will not meet the requirement of being let for at least for 105 days in the first 12 months. Will HMRC make an allowance for these exceptional circumstances and either reduce the 105 day requirement (e.g. pro rata for months not affected by lockdown) or allow a period of grace election.
Posted Tue, 26 May 2020 17:06:00 GMT by HMRC Admin 2

No rulings have been made to date concerning the condition being met regarding the statutory number of days (105) that must be met in respect of the letting of accommodation to the public on a commercial basis.

Information will be made available concerning this aspect when the COVID-19 has eased.

Please contact us again in a few months for an update.

Thank you.
Posted Tue, 15 Sep 2020 11:38:10 GMT by Kevin Sowerby
Please could you provide an update?
Posted Thu, 17 Sep 2020 16:33:49 GMT by HMRC Admin 10

Thank you for contacting us again.

We still have not received specific guidance on the question that you have raised.

However, within the criteria for FHL there is an oppurtunity for you to make a" period of grace election" where the FHL conditions have been met in the previous year but then have not been met in the following year (and the one after) even though genuine attempts have been made to market the property as FHL.

This includes possible situations where lettings are cancelled due to unforseen circumstances.

Further information on this can be found at :

HS253 Furnished holiday lettings (2020)

The election will need to be made on the UK Property page.

I hope this helps.

Posted Sun, 20 Sep 2020 16:09:35 GMT by Carol Taylor-Gill
Thank you for your response, I am in exactly the same situation as the original community member. Unfortunately a period of grace election is N/A as this is our first 12 months of operation, therefore no prior period in which to qualify. I would have qualified this year but for cancellations due to COVID lockdown. Please advise on further suggested course of action or whether a further ruling is expected.
Posted Mon, 21 Sep 2020 14:29:26 GMT by HMRC Admin 2

At this time we do not have any further information regarding any other rulings being made on this.

A case by case review can be made but this must be done in writing and we are unable to post individual advice specific to a persons own tax on this forum.

Please contact us by telephone or post for more individual advice.

Any changes to rulings if they occur will be made available on GOV.UK in due course.

Thank you.
Posted Sat, 24 Oct 2020 11:56:20 GMT by Sean Lang
Hi, Like the original member (Kevin Sowerby) and the follow-up response (Carol Taylor-Gill), I am in exactly the same position. I have a new FHL and cannot use the period of grace election. Please can we get some advice on how to proceed. Thank you
Posted Wed, 28 Oct 2020 15:08:49 GMT by HMRC Admin 4
Please see the following link to the helpsheet about FHL's and period of grace elections.

HS253 Furnished holiday lettings (2020)

We do not have any further guidance as to how FHL's and elections will be affected by the pandemic.  As this would only affect income to be declared on your tax return after 5 April 2021, we may not get any guidance until after that time.
Posted Wed, 28 Oct 2020 15:23:01 GMT by Sean Lang
Hi, Thank you for your reply but, sadly, it doesn’t answer the question. For the people in this thread, this cannot wait until Apr 2021. I bought in Sep 19 and therefore have income to declare on my 19/20 return (due by Jan 21). In order to establish whether I am eligible to count this income as a FHL then I have to consider the first year of ownership rather than the first tax year (Sep 19 - Sep 20). This period most definitely does include the pandemic. Your suggestion that the pandemic will only affect income to be declared in Apr 21 may be true but it misses the point that there is a clear impact on how 19/20 income is treated. Please could you look at this again. Thank you.
Posted Fri, 30 Oct 2020 12:02:46 GMT by HMRC Admin 4
Thank you for your question. Unfortunately I am able to provide you with any further information at present as we are still awaiting further guidance on this matter.
Posted Thu, 03 Dec 2020 11:09:24 GMT by Sam S
Is there any update on this please i.e. adjustments to the 105 day requirement for FHLs in the first year of operations impacted by COVID ? Thanks for your help.
Posted Thu, 10 Dec 2020 10:25:21 GMT by HMRC Admin 11
Hi Sam S, 

I am sorry but there have been no further updates to date.

Thank you.
Posted Thu, 31 Dec 2020 17:19:27 GMT by Stephen Foster
Do these forums just respond to questions on issued policy or do they also take issues raised to appropriate authorities to consider? I anyone actively considering this issue at the moment?
Posted Tue, 19 Jan 2021 13:10:48 GMT by Elizabeth Fillmore
If a property that has qualified as an FHL or many years is sold in February 2021, has been let for more than 105 days in the 12 months pre sale but has not met the 210 days available for let due to COVID lockdowns will Entrepreneurs Relief be denied or is there a dispensation for lockdown
Posted Mon, 25 Jan 2021 10:43:01 GMT by HMRC Admin 4
There is no COVID relaxation in relation to the availability condition for furnished holiday lets. So, if the property is not available for the 210 days, then the FHL status is immediately lost. Please find links to further guidance:

Property Income Manual 4110

Regarding Entrepreneurs Relief, now known as Business Asset Disposal Relief. The FHL trade is deemed as ceasing when the FHL conditions ceased to be met. Although the business may continue as an ordinary property business.
If the property is sold after the FHL business has ceased, the disposal will continue to qualify for entrepreneur’s relief, provided the sale is within three years of the date the FHL business ceased. This is in accordance with legislation set out at TCGA 1992, s169I (4).  There is no restriction on the use to which the property can be put during the period from the cessation of the FHL business to the date of sale. However, it is a strict three-year statutory time limit.
Please see links to further guidance at

HS275 Entrepreneurs' Relief (2020)

Capital Gains Manual 64045
Posted Mon, 25 Jan 2021 11:06:47 GMT by Stephen Foster
So presumably you can count lock down days when you are prevented by law towards the 210 days availability, otherwise everyone’s FHL businesses will cease this year.
Posted Sun, 14 Mar 2021 14:54:47 GMT by Stephen Foster
Is anyone still monitoring/replying to this thread?
Posted Sat, 10 Apr 2021 14:29:37 GMT by Mary
If you have had to cancel bookings which are covered by holiday let insurance for denied access due to Covid. The insurance payment received must be declared as income, if these payments are taxable as income, surely they must be included in the 210 available and in the 105 days let. Can anyone confirm please.
Posted Wed, 14 Apr 2021 13:48:55 GMT by HMRC Admin 2

It would count in the availability condition but not the letting condition as it was not actually occupied. 

Thank you.
Posted Wed, 14 Apr 2021 14:41:48 GMT by Stephen Foster
As there were at least 215 nights, possibly more, when letting/occupancy was not allowed then no one can meet the 210 nights availability criteria and almost certainly not meet the 105 nights occupancy as it would require greater than 70% sell through during a period of great disruption. Therefore unless you are fortunate enough to be qualify to use the period of grace any new FHL operations could start and any existing would cease. This doesn’t seem to make sense. What should people in these positions do?

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