Furnished holiday lets: tips on how to deal with tax changes

With the proposed abolition of tax breaks for furnished holiday lets (FHL) we look at the practical implications for owners that decide to continue their business as well as those who want to sell up

In the 2024 Budget, the Chancellor Jeremy Hunt announced that furnished holiday let (FHL) status will be abolished from 1 April 2025. However, draft legislation has not been included in Finance Bill (No.2) 2024 nor has the Treasury issued any detailed guidance for consultation as yet, raising questions about when the rules will come into effect.

FHL status – recap

When a letting business qualifies as an FHL (see here for qualifying conditions), it does not amount to a trade, but a number of tax breaks apply that do not apply to a general letting business, including:

• business asset disposal relief (BADR) can apply on a disposal of the business;

• holdover and rollover relief can be claimed;