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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I would appreciate clarification on this matter. I have a single

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I would appreciate clarification on this matter. I have a single furnished holiday let (FHL) which I make available and let out in compliance with the definition of a FHL. In anticipation of disposing of this business in a few years time, I would like to know if I need to register with HMRC as a sole trader in order to be eligible to claim entrepreneurs relief on any capital gain, or if I can claim this relief as an individual carrying on a FHL business not having registered with HMRC as a sole trader. In other words, for entrepreneurs relief purposes, are owners of properties used as FHLs considered by HMRC to be de facto sole traders, or do they actually have to register as a sole trader. Also, would there be any financial downside in registering as a sole trader in any event, in order to avoid any potential complication on disposal of the FHL?
Hi. You don't need to register as self-employed if you run a furnished holiday let. I did check this a few years ago with HMRC and they told me that there was no need. A FHL can change from being a FHL to a regular property let almost overnight if the qualifying criteria fail to be met which would cause problems with self-employment basis periods, cessations etc so whilst you may qualify for entrepreneurs' relief and business asset rollover relief as a self-employed individual might, the income from a FHL is taxed on a strict tax year basis and the SA105 property pages has a section for FHL income and expenses. I hope this helps but let me know if you have any further questions.
Customer: replied 2 years ago.
That's great Tony. So I just complete the section on SA105 for my FHL, and I will be eligible and subject to the same conditions for entrepreneurs relief as a self-employed trader would be. Is this correct? Thanks
That's correct.
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