Richard Curtis warns that owners of furnished holiday lettings should be aware of recent tax changes.
For many years, unlike normal rented properties, the rent from a furnished holiday letting (FHL) was treated as trading rather than investment income, which had several tax benefits.
Broadly, a property could be treated as an FHL if, in each tax year, it was available for short-term letting for 210 days and was in fact, let for 105 days or more and it was not used as a long-term let of more than 31 days for significant periods.
Unfortunately, this distinction and the accompanying tax advantages ceased to have effect from 6 April 2025 (or 1 April if the property was owned by a company) and the rent received will now be treated the same as for any other let residential property. The main effects are outlined below.
Income tax
Although the
