Corporation Tax Act 2009 section 268

Under-used holiday accommodation: averaging elections

Section 268 allows a company to use an averaging calculation so that holiday accommodation which falls short of the 105-day letting threshold can still qualify as furnished holiday accommodation, provided the average across all the company's holiday properties meets the threshold.

• Where some properties meet all the qualifying conditions and others fail only the 105-day letting test, the company can elect to average the letting days across all those properties.
• If the average number of days let across the chosen properties is at least 105 days, the under-used properties are treated as qualifying holiday accommodation.
• The election must be made within two years of the end of the accounting period to which it relates.
• Separate elections must be made for UK properties and for properties in EEA states other than the UK.