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This guidance note sets out the qualifying conditions for a property let to be treated as a furnished holiday let (FHL) for tax purposes and the subsequent tax implications. The Government has announced at the Spring Budget 2024 the abolition of the furnished holiday let (FHL) tax regime from April 2025. To prevent using unconditional contracts to access the beneficial capital gains tax treatment the proposed legislation will also include an anti-forestalling rule which will apply from 6 March 2024.

Whether or not a property qualifies as an FHL can make an important difference to the taxation implications. In particular, the letting of furnished holiday accommodation can benefit from a more beneficial regime in some respects. The main benefits of an FHL is that it is treated like a trade for certain purposes which can be advantageous for the purposes of capital allowances, capital gains reliefs, interest costs, pension contributions and national insurance, see more details on each of these areas below. The accommodation can be a house,