Some furnished holiday letting (FHL) businesses consist of more than one property. In such cases it is possible that one property satisfies the conditions to be a FHL whereas another fails to qualify. Where this is the case and the only reason that the other property fails the test is because it is does not meet the letting condition (ie it is not actually let commercially to the public for 105 days in the relevant period), an election may be made to bring the average up to at least 105 days1.
Where two or more properties are under-used, it may be the case that one particular property is so under-used that no amount of averaging will allow it to reach the 105 days figure. Consequently, the taxpayer may choose which properties may be brought into the averaging election2. The averaging election can only apply across properties in a single UK or EEA property business. It is not possible to average across a mix of UK and EEA properties3.
Suppose Jane owns three cottages in the UK that are used for FHL between 1 May and 30 September each year.
Property A is occupied (on commercial short-term lets) for 160 days in a particular tax year; property B is occupied for 90 days; property C is occupied for only 50 days.
If Jane were to make an averaging election in respect of all three properties, the total would be 300 days which gives an