The commercial letting of furnished holiday accommodation has, since 1984, benefited from special treatment for income tax and capital gains tax purposes.

Although a number of changes have been made since the rules were originally introduced, current benefits include the exception from the restriction on deductibility of finance costs and treatment of profits as relevant earnings for pension purposes (income tax) and treatment as a trade for the purposes of rollover relief, gift relief and business asset disposal relief (capital gains tax). However, there are no corresponding provisions for inheritance tax (IHT) purposes.