PIM4180 | Repeal of Furnished Holiday Lettings rules : Capital Allowances

The furnished holiday lettings rules cease to apply in tax years commencing on or after 6 April 2025 for Income Tax and for Capital Gains Tax, and for accounting periods commencing on or after 1 April 2025 for Corporation Tax and for Corporation Tax on chargeable gains.

Treatment before repeal

FHLs were treated in the same way as a trade for the purposes of capital allowances. FHL businesses were entitled to capital allowances on plant and machinery such as the furniture, white goods, etc. within the property whereasnon-FHL property businesses did not and still do not qualify for capital allowances on these items (see CA23060).

Treatment after repeal

The special treatment of furnished holiday lettings (FHL) for capital allowances purposes no longer applies for periods of account commencing on or after 6 April 2025 for Income Tax and for accounting periods commencing on or after 1 April 2025 for Corporation Tax and there are transitional arrangements see -CA20025 - Plant and Machinery Allowances (PMA): introduction: furnished holiday lettings business (repealed)