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Throughout this manual, all legislative references are to (“TCGA92�) unless otherwise stated.

Sections 241 and 241A

The special treatment of furnished holiday lettings (FHL) for tax purposes no longer applies from 6 April 2025 (from 1 April 2025 for Corporation Tax purposes).Ìý The consequences of the abolition for capital gains purposes are explained at CG73505.

previously provided that the definition of ‘furnished holiday lettingsâ€� in (for individuals and partnerships) and (for companies), seeÌýPIM4100, also applied for Capital Gains Tax (CGT) and Corporation Tax on Chargeable Gains purposes.Ìý This applied to properties in the UK and was extended to properties situated within the European Economic Area (EEA) from April 2011 by section 241A.

The guidance atÌýPIM4100Ìýshould be referred to if you need to determine whether a property qualified as furnished holiday lettings for the purpose of any of the reliefs mentioned below.Ìý See also CG73505 for the transitional consequences of the ending of FHL treatment and for an explanation of the rule preventing certain forestalling arrangements.

Reliefs

Former sections 241(3) & (3A) andÌý241A(4), (5) & (11)

For periods before 6 April 2025 for CGT and before 1 April 2025 for Corporation Tax the following treatment applied for the purposes of the reliefs listed below

·ÌýÌýÌýÌýÌýÌý any UK property business which consists of, or so far as it consists of, commercial letting of furnished holiday accommodation was treated as a trade.

·ÌýÌýÌýÌýÌýÌý any overseas property business which consists of, or so far as it consists of, the commercial letting of furnished holiday accommodation in one or more EEA states was treated as a trade.

·ÌýÌýÌýÌýÌýÌý all such furnished holiday lettings undertaken by a particular person or partnership was treated as a single trade.

The reliefs to which the above treatment applied are

1.ÌýÌýÌýÌý Roll-over relief under , seeÌýCG60250C, and in particular CG60281.

2.ÌýÌýÌýÌý Business asset disposal relief under , seeÌýCG63950P, and in particularÌýCG63965.

3.ÌýÌýÌýÌý Gifts hold-over relief under , seeÌýCG66880P.

4.ÌýÌýÌýÌý Relief for loans to traders under , seeÌýCG65930P.

5.ÌýÌýÌýÌý Substantial shareholdings exemption under , seeÌýCG53000PÌýand in particularÌýCG53007.

An ‘overseas property businessâ€� or ‘UK property businessâ€� takes the meaning as defined in Ìýor â€�).

Trade purposes throughout chargeable period

Sections 241 (4) andÌý241A (6)

The definition of furnished holiday lettings in (or the equivalent) can be satisfied even if the property was only actually let as holiday accommodation during part of the chargeable period in question. If the property satisfied the requirements of ITTOIA 2005 (or the CTA 2009 equivalent), it was treated as being used and used only for trade purposes throughout the chargeable period in question, subject to the following exception.

Sections 241(5) and section 241A(7)

The exception to the rule above is that the property was not to be treated as used for trade purposes at any particular time, if

·ÌýÌýÌýÌýÌýÌý it was not commercially let at that time, and

·ÌýÌýÌýÌýÌýÌý it was not available to be commercially let at that time.

Any periods during which the property was not commercially let, and was not available to be so let, solely due to the carrying out of any repair or construction work on the property, were to be treated as periods of trade usage.

Example

Laura acquired a cottage in April 2006. She immediately furnished the cottage and made it available for holiday letting.

During the period from April 2006 to October 2008, the cottage was constantly available for holiday letting and was actually let for sufficient periods to satisfy the requirements of .

In October 2008, the property was damaged in a storm. Laura immediately put in hand the necessary repair work which was completed in April 2009. However, she decided not to let the cottage between April 2009 and April 2011.

The lettings recommenced in April 2011 and continued, satisfying the requirements of , until the cottage was sold in April 2024.

The periods of qualifying use, treated as trading for the purpose of the reliefs listed above, are as follows;

·ÌýÌýÌýÌýÌýÌý April 2006-October 2008 (actually let);

·ÌýÌýÌýÌýÌýÌý October 2008-April 2009 (undergoing repairs);

·ÌýÌýÌýÌýÌýÌý April 2011-April 2024 (actually let).

The only period of non-qualifying use was between April 2009 and April 2011.

Property only partly used as Furnished Holiday Lettings, sections 241(7) and 241A(9)

If only part of a property was let as furnished holiday lettings, an apportionment between the part so used and the remainder should be made on a just and reasonable basis. In particular, the approach taken for the purposes of , seeÌýCG74150P, should be followed.

Private residence relief, sections 241(6) and 241(8)

Where a property which

·ÌýÌýÌýÌýÌýÌý has been used for furnished holiday lettings, and

·ÌýÌýÌýÌýÌýÌý whose acquisition cost has been reduced as a result of roll-over relief under or

qualifies for private residence relief (seeÌýCG64200C) a special rule applies, seeÌýCG65090.