If you operate a B&B or guesthouse as a sole trader or partnership, could this be a good time to put it on the market? Some valuable tax reliefs will disappear on 5 April 2025 including the 10% rate of Capital Gains Tax on a sale. So, instead of 10%, you will pay 18% or 24%.
Food for thought, particularly if you have owned the property for a while and anticipate a large Capital Gain.
The Furnished Holiday Let (FHL) Regime has become more complex over the last few years but was still quite valuable to those who operated self-catering holiday accommodation.
The change aims to increase long-term rental options for locals and raise tax receipts to help fund national insurance cuts.
The specific tax advantages being lost include:
- Claiming plant and machinery allowances on items of fixtures, furniture, furnishings and equipment.
- Capital gains tax (CGT) reliefs for traders such as rollover relief and mitigating CGT on disposal of a property.
- Finance and interest restrictions did not apply to loans and mortgages on FHL properties.
The cliff edge abolition date of 6 April 2025 may prompt a rush to sell such properties to capitalise on the potential 10% CGT tax rate. Will you be part of that rush?
