As of 6 April 2025, the Furnished Holiday Lettings (FHL) tax regime has officially been abolished.
If you own a holiday let, this means the special tax treatment that once applied to FHLs no longer exists. Whether you plan to keep letting your property or are considering selling, there are some important things to be aware of.
🧾 What’s Changed?
Up until now, properties that met the FHL criteria benefited from a range of tax advantages, including:
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Capital allowances on furniture, fittings and equipment
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Business Asset Disposal Relief (BADR) eligibility on sale
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Access to pension contributions based on FHL profits
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More generous treatment of losses
As of 6 April 2025, these tax benefits no longer apply. FHLs are now treated the same as any other residential rental property for tax purposes.
🔁 What If You’re Still Letting the Property?
You can absolutely continue to rent your property as a short-term holiday let – but your tax position has now changed. From 6 April 2025 onwards:
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You can’t claim capital allowances on new fixtures or equipment
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Your income is taxed under the standard property income rules
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Any future sale may not qualify for Business Asset Disposal Relief
If you weren’t able to take action before the deadline, don’t worry – there are still ways to plan smartly and avoid unexpected tax bills.
💡 What If You Ceased Trading Before 6 April 2025?
If you formally ceased your FHL trade before the deadline, you may still be eligible to claim Business Asset Disposal Relief (BADR) when selling your property – as long as you sell within three years of stopping.
This relief could reduce your Capital Gains Tax to just 10% – a significant saving if you’re planning to exit the holiday let market.
If you didn’t formally cease trading before the deadline, we’d recommend reviewing your options with us, as there may still be strategic planning opportunities.
🛠️ Capital Allowances – Now Closed for New Claims
If you made any qualifying capital investments in your FHL before 6 April 2025, you may still be able to claim capital allowances on that spend – but no new allowances can be claimed going forward.
If you’re unsure what qualifies or want to double-check you’ve claimed everything you’re entitled to, we’re here to help review that with you.
✅ How A&C Chartered Accountants Can Support You
Whether you’ve continued letting your property or are planning a future sale, we can help you:
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Review your current tax position
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Plan for any potential CGT liabilities
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Maximise any reliefs still available
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Understand your new reporting obligations
📞 Need Advice on Your Holiday Let? Let’s Talk.
This change marks the end of a long-standing tax regime, and for many property owners, it raises new questions.
If you’d like tailored advice on your options now that the FHL rules have been abolished, get in touch with your client manager at A&C Chartered Accountants. We’re here to help you navigate the changes with clarity and confidence.