[Company name]

Abolishment of Furnished holiday lettings tax regime confirmed

Talk to an expert

HM Revenue and Customs (HMRC) have published draft legislation and a policy paper outlining the proposal for the abolition of the furnished holiday lettings (FHL) tax regime. This was originally announced by the previous government and any hopes that this may be stalled by the new government are now laid to rest.


The new measures are proposed to take effect on or after 6 April 2025 for income and capital gains tax, and from 1 April 2025 for corporation tax.


The proposed revisions will remove the tax advantages that furnished holiday let landlords have over other property businesses, as follows:

  1. Loan interest will be restricted to the basic rate for Income Tax.
  2. Capital allowance rules for new expenditure will be removed and replaced with the replacement of domestic items relief available to other property businesses.
  3. Capital gains tax reliefs based on disposing a business asset will no longer apply to furnished holiday lets.
  4. Furnished holiday let income will no longer be included within relevant UK earnings when calculating maximum pension relief.

There are some specific transitional rules that will apply to these changes.

If you own properties that currently qualify for the FHL tax regime, we recommend that you review the effects that the change in legislation will have on you so that you can determine if you need to take any action. If you need any help with this, please do not hesitate to contact us, we would be pleased to help you.


See:
May 27, 2025
What the New UK-EU Deal Could Mean for Your Business

The UK government has agreed a new trade deal with the European Union, aimed at making it easier to do business across the Channel. This follows recent agreements with the US and India and is being presented as part of a wider effort to support jobs and help businesses grow.

Read article
May 22, 2025
New Free HSE Tool Helps Employers Tackle Work-Related Stress

Last week was Mental Health Awareness Week, and to mark the occasion, the Health and Safety Executive (HSE) launched a free online learning module to help employers better understand and manage work-related stress in their teams.

Read article