Responding to HMRC’s draft Finance Bill consultation on proposed abolition of the furnished holiday lettings tax regime, the ATT notes the reduction in complexity associated with fewer types of property rental businesses for tax purposes, but also sets out a much longer list of potential ‘negative outcomes’.
Implementing the reform on 6 April 2025, without any phasing in, risks shocking the current FHL market and potentially the wider housing market and associated local and regional economies, says the ATT – for example if landlords decide to sell up as a result of the changes. Abolition of the regime also reintroduces uncertainty around when property letting is investment and when it amounts to trading; guidance will be imperative. Clarification is also sought around the availability of business asset disposal relief, particularly if the end of the regime in effect causes a deemed cessation of the FHL business.
Responding to HMRC’s draft Finance Bill consultation on proposed abolition of the furnished holiday lettings tax regime, the ATT notes the reduction in complexity associated with fewer types of property rental businesses for tax purposes, but also sets out a much longer list of potential ‘negative outcomes’.
Implementing the reform on 6 April 2025, without any phasing in, risks shocking the current FHL market and potentially the wider housing market and associated local and regional economies, says the ATT – for example if landlords decide to sell up as a result of the changes. Abolition of the regime also reintroduces uncertainty around when property letting is investment and when it amounts to trading; guidance will be imperative. Clarification is also sought around the availability of business asset disposal relief, particularly if the end of the regime in effect causes a deemed cessation of the FHL business.
