The Chancellor also announced the abolition of the Furnished Holiday Lettings (FHL) tax regime – the significant tax advantages over standard long-term lets have now gone.
This is because, from a taxation point of view, you are no longer running a business. From April 2025, in the eyes of HM Revenue & Customs, despite the work involved, furnished holiday lets are treated as passive investments and taxed as such. The regime is being brought into line with standard buy to lets, which themselves have suffered from tax increases recently.
The new rules will not be finalised until they appear in the Finance Act, but it looks likely they will be approved.
It is important to take professional advice before making any decision relating to your personal finances. Information within this article is based on our current understanding and can be subject to change without notice and the accuracy and completeness of the information cannot be guaranteed. It does not provide individual tailored investment advice and is for guidance only. Some rules may vary in different parts of the UK.