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Overview

Broadly a 'furnished holiday let' (FHL) is a furnished residential property that is let on short term tenancies during the tax year. The furnished holiday let rules are abolished from 6 April 2025 and an anti-forestalling rule applied from 6 March 2024. The commentary below explains the rules that applied for 2024/25 and earlier years.

If the property meets the conditions to be classed as an FHL (see 'Conditions' below) then it qualifies for tax reliefs and tax treatments that other rental residential properties do not:

1. Ìý

   •ÌýÌýÌýÌý capital allowances (see UK2.2.4)

2. Ìý

   •ÌýÌýÌýÌý various UK capital gains tax reliefs (ie business asset disposal relief, roll-over relief, business asset gift relief and irrecoverable loan to trader, see UK2.3.3)

3. Ìý

   •ÌýÌýÌýÌý the profit from an FHL business counts as relevant UK earnings for pension contribution purposes (FA 2004, s 189(2)). See UK1.3.1

4. Ìý

   •ÌýÌýÌýÌý exemption from the restriction of relief for finance costs related to the letting of residential property. See UK2.1.4

(ITTOIA 2005, s 322(2)).

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