NEW Guides & Publications17 Oct 2024
Alliotts Focus – Winter 2024
In this edition of Alliotts Focus we look at; Self-assessment registration, landlord legislation changes, dividend taxation, and voluntary business liquidations
Articles
The current rules Furnished Holiday Lettings (FHLs) have sprouted like mushrooms up and down the country (not to mention the meteoric rise of Airbnb), replacing traditional buy-to-let properties. They differ from buy-to-lets in that they have their own set of... Read more
The current rules
Furnished Holiday Lettings (FHLs) have sprouted like mushrooms up and down the country (not to mention the meteoric rise of Airbnb), replacing traditional buy-to-let properties. They differ from buy-to-lets in that they have their own set of unique tax advantages attached to them.
The conditions a property must meet to be an FHL which are:
The current tax advantages of meeting the conditions.
If an owner of an FHL property meets the conditions set out above, then, the property qualifies as an FHL, in which, there are certain tax advantages they enjoy:
What’s the government changing?
The regime will be abolished in its entirety from 6 April 2025, and documents from Whitehall estimate it will raise an additional £600m for HMRC by the tax year 2028-29. The government’s argument for the scrapping of the FHL regime is because these types of properties reduce the availability of long-term rentals for residents in coastal towns and holiday destinations, which only accelerate the current housing crisis we find ourselves in with unaffordable rents and high house prices.
What does it mean for FHL owners – the tax impact?
Firstly, the tax advantages FHLs receive as outlined above, will be abolished from 6 April 2025.
Owners of FHLs may wish to consider tax planning options in advance of 5 April 2025 to take advantage of any favourable reliefs that may be currently available to them.
If you would like to discuss the tax planning options, please contact us.
THE AUTHOR
Senior Associate, Corporate Tax
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