Furnished Holiday Let Tax Calculator UK 2025/26

Reviewed by Mustafa Bilgic
UK Calculator Editor · Updated May 2026

FHL abolition: what's changing from April 2025

From 6 April 2025, the Furnished Holiday Let tax regime ends. Properties that previously qualified as FHLs (let furnished, available 210 days, actually let 105 days, no continuous let exceeding 31 days) lose their trade-style tax status.

Four key losses: (1) mortgage interest moves from full deduction to the 20% Section 24 credit; (2) capital allowances are replaced by the more restrictive 'replacement of domestic items' relief; (3) FHL income no longer counts as 'relevant earnings' for personal pension contributions; (4) Business Asset Disposal Relief (10% CGT, rising to 14% from April 2026) is no longer available on FHL disposals — standard residential CGT (18%/24%) applies.

Transitional rules in 2025/26

Existing FHL businesses can continue to claim capital allowances on existing pools (not new additions) for one further year. FHL losses brought forward at 5 April 2025 are usable against the new property business profits.

If the FHL is sold after 6 April 2025, BADR is unavailable. Sellers planning a disposal generally completed before 6 April 2025 to lock in 10% CGT (or 14% rate from April 2026).

Cornwall cottage, higher-rate owner (FHL pre-2025)

Income £30,000, expenses £8,000, interest £6,000. Pre-2025: profit £16,000 at 40% = £6,400. From 2025/26: profit £22,000 at 40% = £8,800; credit £1,200. Net £7,600. Annual cost increase £1,200.

Lake District let, additional-rate owner

Income £45,000, expenses £12,000, interest £10,000, other income £150,000. Pre-2025: profit £23,000 at 45% = £10,350. From 2025/26: profit £33,000 at 45% = £14,850; credit £2,000. Net £12,850. Cost increase £2,500.

Sale comparison BADR vs standard CGT

Gain £150,000 on FHL sale. BADR pre-2025/26: 10% × £147,000 (after AEA) = £14,700. Standard 24% post-abolition: 24% × £147,000 = £35,280. Extra CGT cost: £20,580.

Common mistakes to avoid

• Thinking the FHL regime is preserved — it definitively ends 6 April 2025.
• Failing to claim BADR on a 2024/25 sale that completed before 6 April 2025.
• Continuing to claim full mortgage interest deduction post-April 2025 — only the 20% credit applies.
• Counting FHL income as pension-qualifying earnings post-April 2025.
• Treating new capital expenditure as eligible for AIA/WDA — capital allowances on new items end with the regime.

When to use this calculator

Critical for FHL owners assessing the impact of abolition. Run for 2024/25 actuals and 2025/26 projections to quantify the change. Sellers should also model a pre-deadline disposal versus post-deadline.

How this differs in Scotland, Wales and Northern Ireland

FHL abolition is UK-wide — England, Scotland, Wales and NI all lose the regime from April 2025. Scottish FHL owners face the same rule changes plus the higher Scottish income tax bands worsening the post-2025 position.

When this calculator is and isn't the right tool

The Furnished Holiday Let Tax Calculator UK 2025/26 above is built for the most common UK 2025/26 scenarios in this tax area. It will be the right tool when your situation maps cleanly onto the inputs — single property or simple aggregation, standard HMRC rates and bands, and individual taxpayer (rather than complex trust or partnership structures). It is informational and does not replace tailored advice from a chartered tax adviser, especially for transactions above £500,000, cross-border situations, or where reliefs interact with each other. For year-end filings, always reconcile with HMRC's own free calculators on gov.uk before pressing submit on Self Assessment.

Closely related calculators

• Holiday Let CGT Calculator — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Landlord Tax Calculator — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Section 24 Calculator — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• Property Income Tax 2025/26 — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.
• CGT on Property — useful when you need a different angle on the same UK property tax topic, especially if your situation involves multiple types of property income or disposal.

Glossary of UK property tax terms

HMRC

His Majesty's Revenue and Customs — the UK tax authority.

Tax year

6 April to the following 5 April. 2025/26 means 6 April 2025 to 5 April 2026.

Marginal rate

The rate of tax that applies to the next pound of income.

Self Assessment

The UK system for individuals reporting income tax outside PAYE.

Tax planning checklist

1. Confirm the figures input above match your actual position — purchase contract, mortgage offer or completion statement.
2. Cross-check the year (2025/26) — figures change every April. The tax year 2026/27 starts 6 April 2026.
3. Use HMRC's official calculator at gov.uk for the final filing figure; this calculator is informational.
4. Keep records for at least 6 years — HMRC's normal enquiry window. 21 years for fraud investigations.
5. Discuss any unusual transaction (joint purchase, gift, divorce settlement, trust) with a qualified tax adviser.
6. Submit your return online via Government Gateway — paper deadlines are earlier and penalties harsher.