Tax Changes for Furnished Holiday Lets – An Update

Tax Changes for Furnished Holiday Lets – An Update
 
Currently, tax advantages are available for qualifying Furnished Holiday Lets, making them a lucrative investment opportunity. Back in March 2024, the Government announced the abolition of these special rules with effect from 6 April 2025, but no further guidance was available ….. until now.
 
Draft legislation has now been published giving us an indication on the upcoming changes which will come into effect from April 2025 to include (but not limited to):-
 

• No higher or additional rate tax relief for loan or mortgage interest, increasing annual taxes on profits,
• Removal of capital allowances tax relief for the acquisition of new fixtures and fittings purchased for the property,
• Withdrawal of trading business related reliefs, increasing the tax due in specific scenarios such as the gift of disposal or a property, or the value subject to inheritance tax.  
• Business profits no longer considered relevant UK earnings for pension relief purposes.