Furnished Holiday Let Tax Changes.
The UK holiday let tax rules are changing permanently. With the abolition of the Furnished Holiday Let regime, owners are approaching the final opportunity to secure capital allowances on their properties.
Final Deadlines Are Approaching.
The UK holiday let tax rules are changing permanently. With the abolition of the Furnished Holiday Let regime, owners are approaching the final opportunity to secure capital allowances on their properties.
- For individuals, the final deadline is January 2027.
- For companies, the final deadline is March 2027.
If allowances are not identified and claimed before these dates, they are lost forever.
Book a free discovery call
with Eureka today.
A Widely Overlooked Opportunity With A Time Limit.
Capital allowances on property purchases are commonly missed. When a holiday let is bought, a significant part of the purchase price often relates to qualifying plant and machinery hidden within the building.
These items are not itemised at purchase and can only be identified through specialist surveying. Without this, allowances are simply overlooked and the deadline passes.
Under the new rules, capital allowances must be claimed before the final cut off. HMRC will not allow late claims once the deadline has passed, even where allowances clearly exist.
This is the last chance to recover relief on many historic property purchases.
What are the furnished holiday let capital allowances rules before their abolished?
Before the budget announcement in March 2024, and until the deadlines, capital allowances provide tax relief for FHL owners on the reduction in value of ‘plant and machinery assets’, such as furniture, fixtures and fittings.
However, a short-term rental has to meet several different criteria in order to be considered am FHL for tax purposes:
Using your allowances before the window closes.
Capital allowances claimed on a holiday let can be used against profits from other UK and overseas rental properties where UK tax applies. This means owners with multiple properties can benefit across their wider portfolio, not just one let.
If you own or have owned a holiday let and have never had a specialist capital allowances review, now is the time to act. Once the deadline passes, the opportunity is gone for good. Request your capital allowances review today.
Questions.
Have any questions that we haven’t answered here? Get in touch with us and we will do our best to answer them for you!
Why Accountants Can’t Claim These Allowances.
Capital allowances on property cannot be identified from accounts alone and usually require a specialist review of the building itself. As accountants are not trained or insured to carry out building surveys, significant capital allowances are routinely missed without this process.
What Are Capital Allowances?
Capital allowances allow businesses to deduct qualifying capital expenditure on plant and machinery from taxable profits. When a commercial property is purchased, part of the purchase price may relate to qualifying assets already within the building, which are often overlooked but can deliver significant tax relief when properly identified.
Who Can Claim Capital Allowances?
Businesses and property owners who incur qualifying capital expenditure, including those who purchase commercial property, may be entitled to claim.
What Can Qualify?
Capital allowances generally apply to qualifying plant and machinery and certain fixtures within a commercial property. These items are often embedded within the building and, when correctly identified through specialist analysis, can be pooled and claimed for tax relief.