We explain furnished holiday let tax changes in plain English, handle it correctly, and make sure you claim every relief you are entitled to, all at a fixed fee.
Furnished Holiday Let Tax Changes
The furnished holiday let regime was abolished from April 2025, so holiday lets lost their special tax treatment, the full mortgage interest relief, capital allowances and capital gains reliefs they used to enjoy, and are now taxed like ordinary rental property.
We help holiday let owners adjust to the new rules, restructure where it helps, preserve reliefs that were locked in before the change, and make sure your property income is now taxed correctly under the ordinary rental rules.
Losing the furnished holiday let status means mortgage interest is now only a 20 per cent credit, capital allowances stop, and the capital gains reliefs on sale are gone, a real increase in tax that needs planning around.
The Detail That Matters
The furnished holiday let regime was abolished from April 2025, so holiday lets lost their special tax treatment, full mortgage interest relief, capital allowances and capital gains reliefs, and are now taxed like ordinary rental property. Adjusting correctly limits the impact.
Until April 2025, qualifying holiday lets enjoyed full mortgage interest deduction, capital allowances on furnishings, and CGT reliefs like Business Asset Disposal Relief on sale. From April 2025 these advantages ended.
Holiday lets are now taxed under the normal property rules: mortgage interest as a 20% credit only, no new capital allowances on furnishings (replacement of domestic items relief instead), and standard CGT on sale.
Capital allowances pools and some reliefs built up before April 2025 can still be used under the transitional rules. We identify and preserve everything the changeover allows.
Where the change hits hard, especially for mortgaged owners, options such as incorporation may help. We model whether they genuinely benefit your situation before recommending anything.
The abolition is a real tax increase for holiday-let owners, especially mortgaged ones, and the transitional reliefs, the capital allowances pool built up before April 2025, are easy to lose if not preserved.
Key Figures
How We Help
We recalculate your holiday let tax under the ordinary property rules, mortgage interest as a 20 per cent credit, and get your returns right.
Some reliefs and allowances built up before April 2025 can still be used. We identify and preserve everything the transition allows.
Where the change hits hard, we consider options such as incorporation, and advise whether they genuinely help your situation.
All the forms, calculations and correspondence handled on your behalf, so you never have to decode HMRC's rules or sit on hold.
A clear fixed fee quoted after a free call, your position explained in plain English, and never a surprise bill.
We act quickly, and where earlier years are involved we put those right too, reclaiming refunds or minimising penalties.
The abolition of the furnished holiday let regime is a significant tax increase for owners, especially mortgaged ones. Adjusting correctly and preserving transitional reliefs is where the impact is managed, and we handle it.
Recent Client Outcome
A holiday-let owner faced higher tax after the regime was abolished, losing full mortgage interest relief and capital allowances.
What we did. We recalculated their income under the new ordinary-property rules, preserved the capital allowances pool built up before the change, and reviewed whether incorporation helped.
The outcome. Their returns were correct under the new rules, the transitional allowances were preserved rather than lost, and the impact of the abolition was minimised.
Adjusting properly, and preserving the transitional reliefs, softened what would otherwise have been a sharp tax increase.
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Questions Answered
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