Furnished holiday lets

The new government has confirmed that it will proceed with the abolition of the furnished holiday let (FHL) rules from 6 April 2025. The main issues associated with this change were discussed in the Summer Newsletter.
Further information has now been published on the transitional rules,

which include that:

where an existing FHL business has an ongoing capital allowances pool of expenditure, it can continue to claim writing down allowances on that pool; and losses on FHL properties can be carried forward and used against income of the UK or overseas property business in which the properties will now be included. An anti-forestalling rule will apply from 6 March 2024 to prevent the use of unconditional contracts to obtain capital gains tax relief under the current FHL rules, where completion of the contract would be after 5 April 2025.

If you own a furnished holiday let, please contact us to see how these changes will affect you and whether, for example, it may be worth disposing of a property this year rather than a bit further into the future.