Making Tax Digital and Furnished Holiday Lets: The Full Picture After April 2025

What happened to Furnished Holiday Lets in April 2025?

The Chancellor announced the abolition of the Furnished Holiday Let tax regime in the Spring Budget of March 2024. The abolition took effect on 6 April 2025, the start of the 2025/26 tax year. All former FHL properties are now treated as standard UK residential rental property for income tax purposes.

The FHL regime was a set of special tax rules that applied to properties meeting specific qualifying tests. Properties that qualified as FHLs were treated more like business assets than investment properties, which gave rise to a range of preferential tax treatments not available to standard residential landlords.

Those preferential treatments are now gone. From 6 April 2025:

• There is no separate FHL income category for tax purposes
• Former FHL income is reported as UK residential property income (or overseas property income for non-UK properties)
• The qualifying tests (availability, letting, and pattern of occupation) are no longer relevant
• Income from short-term furnished lettings is assessed under the same rules as long-term residential lettings

The 2024/25 tax year was a transitional year. Properties that met the FHL qualifying tests during 2024/25 were treated as FHLs for that year. The 2025/26 year — April 2025 onwards — is the first full year under the new rules.

Why was the regime abolished?

The government's stated rationale was twofold. First, the FHL regime had been criticised for distorting housing markets in popular tourist areas — landlords could gain significant tax advantages by offering short-term holiday lets rather than long-term housing, contributing to housing shortages in areas like Cornwall, the Lake District, and parts of Wales and Scotland. Second, the regime was seen as a complexity in the tax system that benefited a relatively small number of landlords with no clear policy justification in the current housing environment.

The abolition was controversial among FHL landlords, many of whom had built business models based on the tax advantages of the regime. The loss of full mortgage interest deductibility and Business Asset Disposal Relief in particular has materially changed the economics of holiday letting for higher-rate taxpayers with mortgaged properties.

How the FHL abolition affects Making Tax Digital thresholds

Before April 2025, FHL income was classified as trading income for some purposes. From April 2025, it is standard property income. For MTD threshold purposes, FHL income counts towards the gross property income threshold in the same way as conventional rental income.

The threshold calculation for former FHL landlords

Making Tax Digital for Income Tax becomes mandatory from April 2026 for landlords whose qualifying income exceeded £50,000 in the prior tax year. The qualifying income is measured from the 2024/25 tax year — the year used to determine the April 2026 cohort.

For the 2024/25 threshold assessment, former FHL income is treated under transitional rules. The key point is that the combined gross income from all property sources — including former FHL properties — is what counts against the £50,000 threshold.

If your FHL portfolio generated significant gross income in 2024/25, it is quite possible that you now cross the MTD threshold even if your long-term rental income alone would not have done so.

Example: threshold impact

Consider a landlord with:

• Two long-term residential lets generating £28,000 gross annual income
• Two furnished holiday let cottages generating £26,000 gross annual income

Combined gross property income: £54,000. This exceeds the £50,000 MTD threshold. Under the new rules, all four properties' income is combined for threshold purposes. This landlord is in scope for MTD from April 2026.

Under the old FHL rules, the FHL income might have been categorised differently for some purposes. Under the post-abolition rules, there is no distinction — all property income is aggregated.

Voluntary MTD adoption for former FHL landlords

Landlords whose combined income is below the threshold can adopt MTD voluntarily. For former FHL landlords who now need to manage their properties under standard residential rules and may also be navigating the Section 24 mortgage interest restriction for the first time, good digital accounting software provides valuable visibility. Voluntary MTD adoption is not compulsory but can be beneficial.

What FHL landlords lost with the abolition

The FHL regime provided four major tax advantages: full mortgage interest deductibility, capital allowances on furnishings, Business Asset Disposal Relief on sale, and the ability to treat FHL income as relevant earnings for pension contribution purposes. All four were removed on 6 April 2025.

Understanding exactly what has been lost is important for planning. The cumulative impact can be significant, particularly for higher-rate taxpayers with mortgaged properties.

1. Full mortgage interest deductibility — now restricted under Section 24

Under the FHL regime, mortgage interest was fully deductible from FHL income, reducing the taxable profit directly. This was a significant advantage over standard residential lets, where Section 24 restricts the deduction to a 20% basic rate tax credit.

From 6 April 2025, Section 24 applies to former FHL properties. This means:

• Mortgage interest is no longer deductible against the FHL rental income to calculate profit
• Instead, a tax credit equal to 20% of the mortgage interest is deducted from the tax bill
• For a basic rate taxpayer, the net effect is similar. For a higher rate taxpayer, the effective tax relief on mortgage interest drops from 40% to 20%

For a higher-rate taxpayer with £30,000 of annual mortgage interest on their FHL property:

• Under FHL regime: mortgage interest reduces taxable profit, saving £12,000 in tax (40% relief)
• Under standard residential rules: tax credit of £6,000 (20% of £30,000)
• Net increase in tax: £6,000 per year on this element alone

This is one of the most material financial impacts of the FHL abolition and is the primary driver of the commercial review many FHL landlords are conducting.

2. Capital allowances — replaced by RDRI only

FHL properties could previously claim capital allowances on furniture, fixtures, and fittings — the actual cost of purchasing sofas, beds, kitchen equipment, and similar items could be written off against income over time. Annual Investment Allowance (AIA) allowed 100% of qualifying expenditure to be deducted in the year of purchase, up to the AIA limit.

From 6 April 2025, capital allowances are no longer available on former FHL properties. The only relief available for furnishings is Replacement Domestic Items Relief (RDRI), which allows you to deduct the cost of replacing an existing item — but not the original cost of purchasing it.

If you purchase a new sofa for £800 to replace an old sofa in your former FHL:

• Under FHL regime: the cost may have been deductible as a capital allowance
• Under standard residential rules with RDRI: the replacement cost (£800, less any proceeds from disposing of the old sofa) is deductible in the year of replacement

RDRI only applies to replacements. First-time purchases of furnishings in a property are not covered by RDRI. This is a significant change for landlords who were actively investing in improving or furnishing their holiday let properties.

3. Business Asset Disposal Relief on sale — now standard residential CGT rates

Under the FHL regime, when you sold a qualifying FHL property, you could potentially claim Business Asset Disposal Relief (formerly Entrepreneurs' Relief). This reduced the Capital Gains Tax (CGT) rate on the disposal to 10%, compared to the standard residential property CGT rates.

From 6 April 2025, Business Asset Disposal Relief is not available on the sale of former FHL properties. Sales are subject to standard residential property CGT rates:

• Basic rate taxpayers: 18% on residential property gains
• Higher and additional rate taxpayers: 24% on residential property gains

The difference between a 10% BADR rate and a 24% standard rate on a significant capital gain is material. A property acquired for £200,000 and sold for £350,000 carries a gain of £150,000. At 10% (BADR), the CGT is £15,000. At 24%, it is £36,000 — a £21,000 increase in tax on the same gain.

Note that the CGT rates for residential property changed in the October 2024 Autumn Budget — the old rates were 18% and 28%. The current rates of 18% and 24% apply from 30 October 2024. Gains on FHL disposals before 6 April 2025 may have been eligible for BADR at 10%; gains after that date are not.

4. Pension contribution relief — FHL income no longer always qualifies

FHL income was treated as relevant earnings for pension contribution purposes, meaning you could use your FHL profits to support pension contributions and claim higher levels of pension tax relief. Standard rental income is not relevant earnings for pension purposes.

From 6 April 2025, former FHL income is standard property income and no longer qualifies as relevant earnings for pension purposes (unless you have other relevant earnings from employment or self-employment). This affects the level of pension contributions you can make and claim tax relief on.

For FHL landlords who had been using FHL income to support significant pension contributions, this may require restructuring their retirement savings strategy. Seek advice from a financial adviser familiar with the interaction of property income and pension planning.

5. FHL losses can no longer offset general income

Under the FHL regime, losses from FHL activities could in some circumstances be offset against other income. Under standard residential property rules, property losses can only be carried forward and offset against future property income from the same property business. They cannot be offset against employment income, self-employment income, or other income sources.

How to calculate if you are in scope for MTD after FHL abolition

Add your gross income from all former FHL properties and all other rental properties for the 2024/25 tax year. Include any self-employment income. If the combined total exceeds £50,000, you are in scope for MTD from April 2026.

Step-by-step threshold calculation

1. List all rental income from former FHL properties in 2024/25 — use gross income before any expenses or deductions
2. Add any other rental property income in 2024/25 — again, gross before expenses
3. Add any self-employment income in 2024/25 — gross turnover, not profit
4. Do not include employment income, savings interest, dividends, or pension income — these do not count towards the MTD qualifying income threshold
5. If the total exceeds £50,000: you must join MTD from 6 April 2026
6. If the total is between £30,000 and £50,000: MTD becomes mandatory from April 2028 (subject to legislation)
7. If the total is below £30,000: MTD is currently voluntary

Important: use gross income, not profit

The MTD threshold is based on gross income — your total rental receipts before deducting any expenses. It is not based on your net profit, your taxable income, or your total income including other sources. Two landlords with the same property portfolio but different expense levels would both be assessed on the same gross income figure for threshold purposes.

For FHL landlords, gross income typically means total booking income received — the rent paid by guests, before deducting letting agent fees, cleaning costs, maintenance, mortgage interest, or any other expense.

The 2024/25 qualifying year and its complexities

The 2024/25 tax year spans April 2024 to April 2025 — a transitional period where FHL income had its last year of special treatment. For MTD threshold purposes, HMRC assesses your 2024/25 income under the new post-abolition rules, even though for 2024/25 itself the FHL rules may still have applied. This means your 2024/25 FHL income counts as standard property income for threshold assessment purposes, regardless of how it was actually categorised in your 2024/25 Self Assessment return.

If this creates complexity or uncertainty about your threshold position, consult a tax adviser familiar with the transitional rules.

How Making Tax Digital reporting works for former FHL properties

Under MTD, there is no distinction between former FHL properties and standard rental properties. All are reported as UK property income (or overseas property income for non-UK properties). The quarterly updates, EOPS, and Final Declaration process is identical to that for standard residential landlords.

Reporting category

In your MTD software, former FHL properties are set up as standard residential properties. You report:

• Rental income received in each quarter
• Allowable expenses under residential property income rules (maintenance, management fees, insurance, etc.)
• Replacement Domestic Items Relief (RDRI) at year-end via the EOPS
• Mortgage interest (recorded quarterly, restriction applied at year-end via the Section 24 mechanism)

Quarterly updates: what to include

Each quarterly update for a former FHL property covers the same categories as any residential rental property:

• Total rental income received in the quarter (gross, before expenses)
• Allowable property expenses paid in the quarter, split by category
• Running cumulative totals for the year to date

The quarterly update is a summary — not a full tax computation. The Section 24 restriction on mortgage interest, and RDRI claims, are applied at year-end in the End of Period Statement, not in the quarterly figures.

End of Period Statement (EOPS) and Final Declaration

At the end of the tax year, you submit an EOPS for your property business. This is where you:

• Confirm or adjust the quarterly figures
• Claim RDRI for replacement domestic items
• Account for the Section 24 mortgage interest restriction
• Include any property income adjustments (bad debts written off, premiums, etc.)

The Final Declaration then brings together your property income with all other income sources — employment, savings, pensions, dividends — to produce the complete tax calculation for the year.

The interaction of Section 24 with former FHL properties in detail

Section 24 — the restriction of mortgage interest deductibility to a 20% basic rate tax credit — now applies fully to former FHL properties from April 2025. This is one of the most financially significant changes for FHL landlords with mortgaged properties.

Section 24 was introduced for standard residential landlords in stages from April 2017, reaching full effect in April 2020. FHL properties were explicitly exempt from Section 24 throughout this period. That exemption ended with the FHL abolition on 6 April 2025.

How Section 24 works for former FHL properties

Before April 2025, a landlord with a mortgaged FHL property would calculate:

Rental income:              £40,000
Less: allowable expenses:   -£8,000
Less: mortgage interest:    -£20,000
Taxable profit:             £12,000

From April 2025, the same landlord calculates:

Rental income:              £40,000
Less: allowable expenses:   -£8,000
Taxable profit:             £32,000
Income tax at 40%:          £12,800
Less: Section 24 credit     -£4,000
  (20% x £20,000 interest)
Net tax payable:            £8,800

Previously the landlord paid 40% of £12,000 = £4,800. Now they pay £8,800 — an increase of £4,000 per year, entirely attributable to the Section 24 change. This is the practical financial impact for a higher-rate taxpayer.

Section 24 and MTD quarterly updates

In your MTD software, you record mortgage interest payments in your quarterly records under the "finance costs" category. However, the Section 24 adjustment — reducing the deduction to the 20% basic rate credit — is made at the End of Period Statement stage, not during quarterly reporting. Your quarterly updates will show the full mortgage interest figure in your records, but the tax computation applies the restriction when calculating the final liability.

This means your in-year running tax estimate from HMRC may not fully reflect the Section 24 restriction until the EOPS figures are submitted. Do not rely on the quarterly estimate as an accurate picture of your tax bill if you have significant mortgage interest; the full calculation at year-end is what matters.

Capital allowances for former FHL properties: the transition

Capital allowances on furniture and fixtures are no longer available for former FHL properties from 6 April 2025. Only Replacement Domestic Items Relief (RDRI) is available. RDRI allows a deduction for the cost of replacing domestic items, but not for the original cost of purchasing them.

What capital allowances were available under the FHL regime

FHL properties could claim capital allowances on a wide range of items, including:

• Furniture: sofas, chairs, dining tables, beds, wardrobes
• White goods: washing machines, dishwashers, fridges, ovens
• Electronic equipment: televisions, sound systems
• Furnishings: curtains, carpets, rugs
• Equipment: garden tools, outdoor furniture, barbecues

The Annual Investment Allowance allowed 100% of qualifying expenditure to be deducted in the year of purchase (within the AIA limit). This was a powerful tool for FHL landlords refurnishing or upgrading their properties.

Replacement Domestic Items Relief: what it covers

RDRI applies to the cost of replacing a domestic item that was already in the property. The conditions:

• The item being replaced must have been present in the property previously
• The new item must be of broadly the same kind as the item replaced
• You deduct the replacement cost, less any proceeds from disposing of the old item
• If you upgrade to a better item (e.g., replacing an old sofa with a significantly more expensive model), you can only deduct the equivalent cost of a like-for-like replacement

RDRI does not cover:

• First-time purchases of items for a property that was not previously furnished
• Items fixed to the building (these are claimed differently or not at all)
• Improvements beyond replacing an existing item like-for-like

Transitional capital allowances treatment

If you had existing capital allowances pools at the time the FHL regime ended (items that had not been fully written down to nil), HMRC has provided for transitional rules. Allowances accrued under the FHL regime may continue to be available for items that were in pools at 5 April 2025, though the exact transitional treatment is complex. Seek specific advice from a tax adviser if you have significant existing capital allowance pools.

How RDRI is claimed under MTD

RDRI is claimed at the End of Period Statement stage, not in quarterly updates. Record replacement costs in your accounts throughout the year, categorised under "replacement of domestic items." At EOPS, confirm which replacements qualify for RDRI. Your MTD software should guide this process.

AirBnB and short-term let landlords after FHL abolition

AirBnB-style short-term letting income, which previously may have qualified as FHL income, is now treated as standard UK property income. The qualifying tests for FHL status are no longer relevant, and AirBnB landlords are subject to the same rules as all other residential landlords.

What the FHL qualifying tests were

For a property to qualify as an FHL, it had to meet three tests in each tax year:

• Availability test: The property must have been available for letting to the public for at least 210 days per year
• Letting test: The property must have actually been let commercially for at least 105 days per year
• Pattern of occupation test: No single tenant could occupy the property for more than 31 consecutive days for more than 155 days in the year

Properties on AirBnB or Vrbo that met these tests qualified as FHLs. Those that did not (for example, a property let mainly as a single long-term holiday rental to the same family for most of the year) did not qualify as FHL even if furnished and let short-term.

None of these tests are relevant from 6 April 2025. Short-term furnished letting is simply treated as standard property income.

What this means for AirBnB landlords specifically

If you let through AirBnB:

• Your income is now standard property income, not trading income or FHL income
• Section 24 applies to any mortgage interest
• Capital allowances are no longer available on furnishings; RDRI applies instead
• Your total AirBnB income (gross bookings) counts towards the MTD threshold
• You report quarterly under MTD in exactly the same way as a landlord with a long-term residential let

The rent-a-room scheme

A separate point of relevance for some short-term let landlords: the rent-a-room scheme, which provides a £7,500 annual tax-free allowance for letting furnished accommodation in your own home, is unaffected by the FHL abolition. If you let a room in your own home on AirBnB, the rent-a-room rules still apply.

The £1,000 property income allowance — a separate measure that allows individuals to receive up to £1,000 of property income without reporting it — also continues to apply. These are separate from the FHL regime and remain in place.

Business Asset Disposal Relief: the CGT impact on FHL sales

Business Asset Disposal Relief on the sale of FHL properties is no longer available for disposals on or after 6 April 2025. Sales are now subject to standard residential property CGT rates of 18% (basic rate) or 24% (higher/additional rate).

BADR was one of the most valuable advantages of FHL status for landlords planning to sell their properties. A 10% CGT rate compared to 24% on a property with a significant gain was a powerful tax incentive for holding a property as an FHL rather than converting it to long-term letting or selling it under standard CGT rules.

Impact on properties sold after 6 April 2025

Any FHL property sold on or after 6 April 2025 is subject to standard residential property CGT rates. It does not matter how long the property was operated as an FHL, or how large the proportion of the ownership period that pre-dated the abolition — the CGT rules that apply are those in force at the time of the disposal.

If you had been planning to sell an FHL property and were relying on BADR to reduce the CGT, that planning is now redundant. The only relief remaining is the standard annual CGT exemption (currently £3,000 per individual per tax year), Private Residence Relief if the property was also your main home for part of the ownership period, and the ability to offset capital losses against capital gains.

Timing of disposals: the 2024/25 transitional window

Disposals before 6 April 2025 — where contracts were exchanged before that date — may have been eligible for BADR. If you sold an FHL property in the 2024/25 tax year (before 6 April 2025), the old rules likely applied (subject to meeting all qualifying conditions). If you sold after 6 April 2025, BADR is not available.

Some landlords rushed to complete sales before the abolition date. If you are still considering selling former FHL properties, the CGT planning environment has fundamentally changed. A tax adviser can help you understand the most efficient timing and structure for any planned disposal.

Should former FHL landlords consider incorporating?

Limited company ownership avoids Section 24 because companies pay corporation tax on profits (not income tax) and can fully deduct mortgage interest as a business expense. However, the costs of incorporating an existing property portfolio — including SDLT on the transfer and potential CGT — are significant. This is a complex decision requiring professional advice.

The incorporation question has been relevant for residential landlords affected by Section 24 since 2017. For FHL landlords, it now arises for the first time. The analysis is the same, but the starting position is different — FHL landlords are typically more leveraged and have been operating with full mortgage interest relief until now.

Why incorporation avoids Section 24

Section 24 applies only to individuals (and partnerships) reporting property income through Income Tax Self Assessment. It does not apply to companies. A limited company owning rental properties pays corporation tax on profits, and mortgage interest is a deductible business expense for corporation tax purposes. The restriction to a 20% credit does not exist in the corporation tax framework.

The costs of incorporation

Transferring personally-owned properties into a company typically triggers:

• Capital Gains Tax: The transfer is treated as a disposal at market value. If properties have appreciated significantly, CGT is payable by the individual on the transfer
• Stamp Duty Land Tax (SDLT): The company purchasing the properties pays SDLT at commercial rates, plus the 3% surcharge on additional residential dwellings
• Legal and professional costs: New mortgage in the company name (buy-to-let lenders have different rates for companies), conveyancing, accountancy

For most landlords, the upfront cost of incorporation exceeds the annual tax saving from avoiding Section 24 by several years. For landlords with very large mortgage portfolios, the annual saving may be large enough to justify the upfront costs; this depends heavily on the specific numbers.

MTD does not apply to limited companies

Making Tax Digital for Income Tax applies to individuals and partnerships. Limited companies are not in scope for MTD for ITSA. This is a secondary benefit of incorporation for landlords who are concerned about the quarterly reporting obligations under MTD. However, companies pay corporation tax and must file company accounts — a different set of obligations that is not necessarily simpler.

The decision in summary

For most former FHL landlords, incorporation is not straightforward and the costs are material. Seek specific professional tax advice before making any decision. The right answer depends on your total portfolio value, current capital gains position, mortgage debt, tax band, and long-term plans. There is no general rule that incorporation is right or wrong — it is always a fact-specific analysis.

Making Tax Digital software for former FHL landlords

Any HMRC-recognised MTD software for landlords handles former FHL properties as standard residential property income. No specialist software is required. LandlordOS supports all UK residential property types including former holiday lets, with correct handling of RDRI and Section 24.

What to look for in MTD software for former FHL landlords

Former FHL landlords have some specific requirements that not all general accounting software handles well:

• RDRI tracking: The software should allow you to record replacement domestic items separately and claim RDRI correctly at year-end
• Section 24 handling: Mortgage interest should be recorded fully in quarterly records but with the restriction applied correctly at EOPS, not as a simple expense deduction
• Property-level income tracking: FHL portfolios often have multiple properties; income and expenses must be tracked at property level for EOPS
• Short-term letting income: If you continue to offer short-term lettings (now as standard property income), the software should handle variable booking income — potentially with multiple tenants per property per quarter — rather than a single fixed monthly rent

LandlordOS for former FHL landlords

LandlordOS supports all UK residential property types. Whether your property is a cottage let on AirBnB, a traditional residential let on an assured shorthold tenancy, or anything in between, it is added to LandlordOS as a property with associated income and expense records.

The platform handles RDRI as a specific expense category at year-end. It records mortgage interest correctly, with the Section 24 restriction applied at the EOPS stage. MTD quarterly updates and the Final Declaration are submitted directly to HMRC via the platform's API connection.

For landlords who previously managed FHL properties as a business (with more frequent tenancy changes, cleaning costs, and maintenance requirements than a standard residential let), LandlordOS's property and tenancy management features are also useful for the operational side, not just the tax reporting.

Sign up free at landlord-os.com/signup — free for up to two properties.

Pension planning after FHL abolition

FHL income was treated as relevant earnings for pension purposes, allowing FHL landlords to make larger pension contributions and claim higher tax relief. Standard residential property income is not relevant earnings. If you have no other employment or self-employment income, the maximum pension contribution you can make to benefit from tax relief may now be lower.

Relevant earnings for pension contribution purposes include employment income and self-employment income. Standard property income (including former FHL income from April 2025) does not qualify. This matters because pension annual allowance tax relief is calculated based on the lower of:

• Your relevant earnings, and
• The annual allowance (£60,000 for 2025/26, subject to taper adjustment for very high earners)

If your only income was FHL income and you were using it to support pension contributions, you may now have a lower effective limit on pension contributions. For landlords with employment income alongside their property portfolio, the change is less significant — employment income remains relevant earnings regardless of the FHL abolition.

Review your pension contribution strategy with a financial adviser who understands the interaction of property income and pension planning in the post-FHL abolition environment.

Frequently asked questions: MTD and FHL landlords

Has the Furnished Holiday Let tax regime been abolished?

Yes — the Furnished Holiday Let special tax regime ended on 6 April 2025. From the 2025/26 tax year onwards, all former FHL properties are treated as standard UK residential rental property for income tax purposes.

Are my former FHL properties now subject to Making Tax Digital?

Yes — FHL income is now standard property income and counts towards the MTD qualifying income threshold. If your gross property income including former FHL income exceeded £50,000 in 2024/25, you must join MTD from 6 April 2026.

How does Section 24 affect former FHL landlords?

From 6 April 2025, mortgage interest on former FHL properties is restricted to a 20% basic rate tax credit under Section 24, rather than being fully deductible. For higher-rate taxpayers with significant mortgage debt, this can materially increase the income tax payable on FHL income.

Can I still claim capital allowances on my former FHL properties?

No — from 6 April 2025, capital allowances are no longer available. The only available relief for furnishings is Replacement Domestic Items Relief (RDRI), which covers the cost of replacing existing items on a like-for-like basis. Original purchases are not covered.

If my FHL income is over £50,000 gross, do I need MTD from April 2026?

Yes — if your gross property income in 2024/25, including former FHL income now reclassified as standard property income, exceeds £50,000, you must be in MTD from 6 April 2026. Threshold is on gross income before expenses.

Will I pay more tax on my former FHL properties after the abolition?

Potentially yes — if you previously benefited from full mortgage interest deductibility, capital allowances, or Business Asset Disposal Relief on sale, those advantages are now removed. The actual financial impact varies significantly by individual circumstances, particularly your tax band and level of mortgage debt relative to property income.

Does the FHL abolition affect overseas FHL properties?

Yes — overseas FHL properties are also brought into standard overseas property income rules from 6 April 2025. The separate overseas FHL regime is abolished. Overseas property income is reported under the overseas property business section of MTD, not the UK property business.

Should I convert my FHL property to long-term letting after the abolition?

This is a business and tax decision that depends on your specific circumstances. The tax advantages of FHL status over long-term letting have largely been removed. The commercial comparison — short-term letting income versus long-term rental income, net of costs — now drives the analysis rather than tax efficiency. A financial adviser or tax specialist can model the comparison for your specific portfolio.

What software should I use for my former FHL properties under MTD?

Any HMRC-recognised MTD software for landlords handles former FHL properties as standard residential property income. LandlordOS supports all residential property types with correct handling of RDRI and Section 24. Sign up free at landlord-os.com/signup.

Where can I find HMRC's guidance on the FHL abolition?

Search "Furnished Holiday Lettings tax regime abolished" on gov.uk. HMRC has published detailed guidance including transitional provisions for the 2024/25 tax year and the post-abolition rules that apply from 2025/26.