From April 2025, holiday lets lose their special tax treatment. Landlords must prepare for new Income, Capital Gains, and Corporation Tax rules. Here's what’s changing.

The repeal of the Furnished Holiday Lets (FHL) regime, a long-standing arrangement that offered tax advantages for individuals and companies letting out properties on a short-term basis, has now come into force. The removal of these benefits will affect both Income Tax and Capital Gains Tax from 6 April 2025, and Corporation Tax (including chargeable gains) from 1 April 2025.

These changes mean that properties previously classified as FHLs will now be treated as part of the individual's overall UK or overseas property business and will be subject to the same rules as non-FHL property businesses.

Under the previous regime, qualifying FHLs benefited from several tax reliefs that were not available to standard buy-to-let properties. These included the ability to claim capital allowances on furniture and fixtures and Business Asset Disposal Relief. With the repeal, these advantages will no longer apply.

Another important aspect of the reform is the removal of the FHL-specific exemption from the jointly held property rules. Under the new rules, income and gains from jointly owned holiday lets will by default be split equally between spouses or civil partners, unless:

• entitlement to the income and the property are in unequal shares; and

• spouses or civil partners have informed HMRC that their share of profits and losses is to match the share each holds in the property. This can be done using Form 17: Declare beneficial interests in joint property and income.

Skip the phone queues. Your Personal Tax Account lets you manage everything from tax codes to refunds online. Quick, secure, and all in one place. If you haven’t signed up yet, now’s the time.

Your Personal Tax Account (PTA) is a simple and secure way to manage your tax affairs online. If you want to complete tasks like checking your tax code, claiming a refund, or updating your details, this can all be done in one place. This offers a practical alternative to contacting HMRC by phone or post, helping you stay on top of your finances with minimal hassle.

While every UK taxpayer is assigned a PTA, individuals must register via the Government Gateway to begin using the service. Identity verification may be required during the setup process.

Currently, the following services are accessible through your PTA:

• check your Income Tax estimate and tax code
• fill in, send and view a personal tax return
• claim a tax refund
• check your Child Benefit
• check your income from work in the previous 5 years
• check how much Income Tax you paid in the previous 5 years
• check your State Pension
• check if you’ll benefit from paying voluntary National Insurance contributions and if you can pay online
• track tax forms that you’ve submitted online
• check or update your Marriage Allowance
• tell HMRC about a change of name or address
• check or update benefits you get from work, for example company car details and medical insurance
• find your National Insurance number
• find your Unique Taxpayer Reference (UTR) number
• check your Simple Assessment tax bill

The PTA plays an important role in HMRC’s ongoing digital transformation, aimed at improving efficiency and accessibility across the UK tax system.