The furnished holiday lettings regime ended on 6 April 2025 (1 April for companies). A holiday let is now taxed like any other let property.
- Gone: Business Asset Disposal Relief, gift holdover relief, rollover relief, capital allowances on new spending, full mortgage interest relief and pension relevant earnings.
- Existing capital allowances pools and carried-forward losses continue under transitional rules.
- Business Relief from Inheritance Tax was rarely available anyway — HMRC v Pawson [2013] found a holiday let was mainly a business of holding property. Assume the full value is in your estate.
- Gifting it to the children now usually triggers Capital Gains Tax, and keeping it until death means Inheritance Tax on its full value.
- Watch for gifts with reservation if you keep using a property you give away.
Start by asking whether your children actually want it. Then check you own it as Tenants in Common and make sure your Will says clearly who takes it, whether it is kept or sold, and how fairness between children is achieved.
Read the full article on our website →
Get Legacy Insights free every Sunday
Six short reads each week on tax, Wills, family wealth and running a business, from John Ireland. Since 1996, three decades of protecting families.