To qualify as a FHL a property must:

• be let on a commercial basis with the view to realisation of profit,

• be in the UK or in the European Economic Area (EEA): the EEA includes Iceland, Liechtenstein and Norway; and

• be furnished: there must be sufficient furniture provided for normal occupation and your visitors must be entitled to use the furniture

• pass the 3 occupancy conditions

All a customer’s FHLs in the UK are taxed as a single UK FHL business and all FHLs in other EEA states are taxed as a single EEA FHL business. They will need to keep separate records for each FHL business because the losses from one FHL business can’t be used against profits of the other.

Occupancy conditions

Accommodation can only qualify as a FHL if it passes all 3 occupancy conditions:

• Pattern of occupation condition

• Availability condition

• Letting condition