FHL Rules repeal postponed

In the parliamentary “wash-up” before the election, the Conservatives managed to get the Government to remove the repeal of the FHL Rules from the Finance Bill before it was passed. This means that, at the moment, the FHL Rules continue in their current form.

However, this is only a temporary reprieve and what happens next will depend on the outcome of the election. Labour have stated that if they are returned to Government, they will repeal the FHL Rules as soon as possible and it is possible that they will backdate the tax changes associated with repealing the Rules to the start of the 2010/11 tax year.

On the other hand, if the Conservatives win a majority, they have stated that they will "consult on a new regime to allow furnished holiday lettings to continue to be treated as a trade, on a fiscally neutral basis". This would probably mean increasing the occupancy threshold for self-catering properties from 10 weeks to something like 15 or 20 weeks.

If there is a hung Government, then there will inevitably be some horse-trading of policies between the parties as they try to form a Government. In this scenario, it is uncertain as to whether FHL Rules would be repealed or not.

So the advice to operators would be to plan on the basis that the FHL Rules are to be repealed for the moment and, if they aren’t, then it will be business as usual.