From 6 April 2025, holiday lets are taxed as standard residential property investments. Mortgage interest is no longer fully deductible; instead, a basic rate tax credit applies (as with buy-to-let properties). Capital allowances for furnishings are no longer available, replaced by the replacement of domestic items relief. Business Asset Disposal Relief and other CGT reliefs exclusive to the FHL regime no longer apply. Profits are also no longer treated as Net Relevant Earnings for pension contribution purposes. Always consult a qualified tax adviser for advice specific to your circumstances.
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