Furnished Holiday Let Tax Calculator

FHL planning tips

1. FHL regime ended April 2025: If you were considering selling a qualifying FHL, a disposal before 6 April 2025 could still benefit from Business Asset Disposal Relief (10% CGT). Disposals after that date are taxed at residential rates (18%/24%).
2. Corporate structure: Some former FHL owners are exploring holding properties through a limited company to benefit from corporation tax rates (25% or marginal relief) rather than income tax at up to 45%. Seek professional advice — the SDLT and CGT cost of transferring can outweigh the benefit.
3. Mortgage interest: Relief is now restricted to 20% basic rate credit. Consider overpaying the mortgage to reduce interest costs, or remortgaging to a lower rate to minimise the impact.
4. Airbnb and short-term lets: All short-term lets are now ordinary residential lettings. There is no longer a special tax regime. Income must be reported on Self Assessment under the normal property income rules.
5. SDLT surcharge: The 3% additional dwelling SDLT surcharge (5% from October 2024) always applied to FHL purchases and continues to apply to short-term let properties — this is unchanged by abolition.

FHL vs residential letting — key differences