When you decide whether a hotel is a qualifying hotel check
whether it satisfied the conditions for being a qualifying hotel
during the period of 12 months that ends on the last day of the
chargeable period for which the allowance is claimed.
In deciding whether the hotel is open for at least 4 months
in the season in the 12 months ending when the chargeable period
ends you may have to look at the season in 2 parts. For example, if
in the example above Jim has an accounting date of 30 June you look
at the months July, August, September 2001 and April, May and June
2002 in deciding whether the Morristown hotel is a qualifying hotel
in the year ended 30 June 2002.
If the hotel was brought into use less than 12 months before
the end of the chargeable period for which the allowance is claimed
you should look at the period of 12 months that begins when the
hotel is brought into use.
For example, suppose that Jim brings the Morristown hotel
into use on 1 January 2002. You should look at the 12 months ended
31 December 2002 in deciding whether the hotel is a qualifying
hotel in the year ended 30 June 2002.
A hotel may fail to be a qualifying hotel because it has
fewer than 10 letting bedrooms. If it builds an extension so that
it has 10 letting bedrooms look at the 12 months beginning with the
time that the extension is brought into use in deciding whether it
is a qualifying hotel.
For example, the Morristown hotel is not a qualifying hotel
when it is constructed but Jim builds an extension that brings it
up to the required number of bedrooms. The extension is brought
into use on 1 April 2002. Jim's accounts are drawn up for the year
ended 30 June 2002. Look at the 12 months ended 31 March 2003 to
decide whether the hotel is a qualifying hotel for the year ended
30 June 2002.
Once a hotel has satisfied the conditions for being a
qualifying hotel for a chargeable period it continues to be a
qualifying hotel until the end of that chargeable period unless it
ceases altogether to be used. It does not matter if the use changes
before the end of the chargeable period provided that the building
is still used for something or is temporarily disused. It stops
being a qualifying hotel as soon as it ceases altogether to be
used.
There is a balancing adjustment if:
Example The Cornwall Hotel is a qualifying hotel.
Its accounting date is 31 March. On 1 January 2002 it is converted
into a student hostel. This means that it ceases to satisfy the
conditions for being a qualifying hotel on 1 January 2002. However,
it has satisfied the conditions for being a qualifying hotel during
the year ended 31 March 2002 because it was a hotel during the
season. This means that it is a qualifying hotel for the year ended
31 March 2002. If there is no balancing event before 1 January 2004
there is a balancing adjustment on that date.
If a qualifying hotel becomes temporarily disused the normal
rules about temporary disuse do not apply
CA32800. It is treated as a qualifying
hotel for 2 years after the end of the chargeable period in which
the temporary disuse begins. It is then no longer treated as a
qualifying hotel and so there is a balancing adjustment if another
2 years go by without it becoming one again.
The excepted use legislation
CA32310 does not apply to qualifying
hotels. This means that a shop inside a hotel will qualify for IBA
provided that it is part of the amenities of the hotel.
