Nick Smith

Hello, • Under s.15 (c) of the Capital Allowances Act 2001, a “UK furnished holiday lettings business” is a qualifying activity. • From PIM4110, a property can only qualify as a Furnished Holiday Let if it meets ‘The Letting Condition’ which states that “the property must be let commercially as furnished holiday accommodation to the public for at least 105 days in the year.” • Under s. 44 of the Deregulation Act 2015, a residential property in Greater London cannot be used as temporary sleeping accommodation without a material change in use if the number of nights it is used for this purpose exceeds 90 nights. Does this mean that a property in Greater London cannot qualify as a Furnished Holiday Let unless it applies for planning permission for a material change of use?

1. A taxpayer is incurring capital expenditure in a new SPV and their qualifying activity won’t start until the scheme completes and they begin to let the units. 2. S. 12 (1) CAA 2001 states “expenditure incurred for the purposes of a qualifying activity by a person about to carry on the activity is to be treated as if it had been incurred by him on the first day on which he carries on the activity” so the taxpayer is entitled to PMAs but cannot claim them until the qualifying activity commences. 3. S. 38A (4) CAA 2001 states “in determining whether expenditure is AIA qualifying expenditure, any effect of section 12 on the time at which it is to be treated as incurred is to be disregarded.” Does this mean that AIA will be denied for the pre-trading expenditure or does this mean that the pre-trading expenditure us AIA qualifying expenditure?