Holiday Let Tax Calculator (FHL Abolished 2025) 2025/26
Model the tax impact of the Furnished Holiday Letting (FHL) regime abolition from 6 April 2025. Compare your tax liability under the old FHL rules versus the new standard property income rules — particularly relevant if you have mortgage debt or previously claimed capital allowances.
Key Inputs
- Annual rental income (£)
- Annual allowable expenses excluding mortgage interest (£)
- Annual mortgage interest cost (£)
- Capital allowances previously claimed (£)
- Income tax rate (basic 20%, higher 40%, additional 45%)
- Previous profit under FHL rules (£)
- Current profit under new standard property rules (£)
What You'll Get
- Tax under old FHL regime (full mortgage interest deduction, capital allowances)
- Tax under new standard property rules from April 2025
- Annual tax difference (additional tax payable)
- Five-year cumulative additional tax estimate
Important Notes — 2025/26 Rates & Caveats
CRITICAL — FHL regime abolished from 6 April 2025. Furnished holiday lets are now taxed as standard residential rental income. Key changes: loss of full mortgage interest deduction (now restricted to 20% basic rate tax credit only); loss of capital allowances on furniture and equipment (replaced by replacement of domestic items relief); loss of CGT reliefs (Business Asset Disposal Relief, rollover relief, gift hold-over relief). Impact is most severe for higher-rate taxpayers with significant mortgage debt. Transitional capital allowance rules may apply — seek specialist tax advice.
Frequently Asked Questions
When was the Furnished Holiday Let (FHL) regime abolished?
6 April 2025 — from this date, FHLs are taxed as standard residential rental income under the property income rules. The announcement was made in the Autumn Statement 2023 and confirmed in the Spring Budget 2024. The abolition applies to all properties that previously qualified as FHLs — there is no grandfathering of the old rules for existing FHL owners.
What tax reliefs did FHL owners lose from April 2025?
FHL owners lost: (1) full mortgage interest deduction — now restricted to the 20% basic rate tax credit available to all residential landlords; (2) capital allowances on furniture, fixtures and equipment — replaced by replacement of domestic items relief (which is more restrictive); (3) CGT reliefs including Business Asset Disposal Relief (formerly Entrepreneurs' Relief), rollover relief and gift hold-over relief; (4) the ability to treat FHL profits as net relevant earnings for pension purposes.
What should holiday let owners do now?
Review the mortgage interest restriction impact — if you have significant mortgage debt, your tax bill may have increased substantially from April 2025. Consider whether to sell before further CGT changes take effect, or whether incorporation (holding via a limited company) makes sense — companies can still deduct mortgage interest in full. Consult an accountant about transitional arrangements for capital allowances already claimed and the interaction with any planned capital expenditure.
Related Calculators
Use the interactive Holiday Let Tax Calculator (FHL Abolished 2025)
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