Furnished holiday lets
Back on 6 March the Conservative Spring Budget announced the FHL (Furnished Holiday Lettings) scheme but failed to included it in the Finance Act.
On 29 July the new Labour government confirmed that they would proceed with this by publishing a policy paper and draft legislation. This is still not law but likely to become so. The key points are:
- Withdrawing capital gains tax relief on gains from trading assets
- Withdrawing corporation tax capital allowances and allowing replacement of domestic items relief
- Restricting finance charges and interest to basic rate of income tax
- No longer including FHL income when calculating relevant earnings for pension relief
There is anti-forestalling legislation to prevent advance action between 6 March 2024 and the effective date on 2025. This means that it is probably too late to take any action to mitigate the tax impact but please talk to us if you are affected.