Holiday lets after the end of the furnished holiday lettings tax regime (UK, April 2025)

What used to qualify, and what changed

Under the old rules, HMRC says a property had to be available for short-term letting to the public for 210 days and actually let for 105 days or more in the tax year, with lets of more than 31 days totalling no more than 155 days in the year. Four advantages followed. All four have gone:

Ordinary running expenses (utilities, repairs, cleaning products, toiletries) are still deductible as before. See buy-to-let tax and the mortgage interest restriction for how the 20% credit works.

Transitional rules

• Capital allowance pools. Expenditure already in a pool by 5 April 2025 can keep generating writing-down allowances until it is used up or a small pool claim is made.
• Losses. FHL losses carried forward become losses of the ongoing UK or overseas property business and can be set against its future profits.
• Business Asset Disposal Relief. It can still apply to a disposal within the normal 3 years after an FHL business actually ceased before 6 April 2025 (1 April for companies). HMRC says the abolition itself does not count as a cessation: a business ceases only when there are no more bookings or lettings and no intention to resume.
• Anti-forestalling rule. Where an unconditional contract was made on or after 6 March 2024 and before 6 April 2025 but completes on or after 6 April 2025, rollover relief, gift relief or Business Asset Disposal Relief applies only if the claim includes a statement confirming the conditions of paragraph 14 of Schedule 5 are met (broadly, no purpose of obtaining the old FHL treatment). This blocks contracts used to lock in the old treatment.
• Lets that started in 2024 to 2025. Where a new let qualified as an FHL in that year, the status applied only to the 2024 to 2025 tax year (or to 31 March 2025 for companies), even if the occupancy test period ran past April 2025.

Joint owners

The share of profit for tax normally follows the share of ownership, though joint owners can agree a different split. For spouses and civil partners, profits are treated as 50:50 unless they own the property in unequal shares and have told HMRC on Form 17, which must reach HMRC within 60 days of the declaration.

Selling a former holiday let

A gain on a former FHL is now taxed like a gain on any other let property, without the old business reliefs. Rates, the annual exempt amount and the 60-day reporting rule are in Capital Gains Tax on a home.

Business rates or council tax

The abolition did not change local taxes. GOV.UK says a holiday let is valued for business rates as self-catering accommodation when it meets letting thresholds:

You apply to the Valuation Office. In Wales, for a 12-month period ending on or after 1 April 2026, the average of the previous 24 or 36 months can be used, and up to 14 nights a year donated to a registered charity count. In England, a single property with a rateable value under £15,000 may get small business rate relief. Scotland and Northern Ireland have their own rules. For a holiday home that stays in council tax, see council tax on second homes and empty homes. Holiday lets rented for less than four months a year are exempt from the EPC requirement, and in Scotland they are exempt from landlord registration but may need a short-term let licence: see landlord registration.

Which professional to consult

An accountant or tax adviser handles the move of an FHL business into the property business, capital allowance pools and losses; HMRC’s documents are the reference. A conveyancer deals with the sale or a change in ownership shares, and a mortgage adviser can review a holiday-let mortgage now that interest relief is limited to 20%. A valuer gives the market value needed for a gift or a transfer between owners.