Where you own a property which you let furnished as holiday accommodation it can qualify for preferential tax treatment where various conditions are met.
To count as an FLH the property must during a twelve-month period:
Where the conditions are not met for a year a period of grace election allows you to treat it as a qualifying year where you genuinely intended to meet the occupancy threshold, but were unable to. An election can only be made where in the year before the first year you want it to apply the property reached the occupancy threshold.
If, in the following year, the property still doesn’t meet the occupancy threshold, as long as an election has been made for the earlier year, that year can also be treated as qualifying.
The election can be made by entering “X” in the appropriate box on the UK property pages of your self-assessment tax return. You can also make an election by sending it in writing to reach HMRC by no later than the 31 January following the end of the tax year for which it is to apply.