Reporting income from FHLs in the 2025/26 tax return - Go Figure Financial | Bookkeeping Services Manchester

The special tax regime for furnished holiday lettings came to an end on 6 April 2025. From that date, furnished holiday lettings are treated in the same way as other residential lets and form part of the same property rental business.

As a result of the changes, the UK property pages of the 2025/26 Self-Assessment return (SA105) have been simplified and there is now only one section for all UK property income where previously there was a separate section for furnished holiday lettings.

Landlords who have income from UK furnished holiday lettings will need to complete the UK property supplementary pages. If they also have other income from UK property, whether from letting residential and/or commercial properties, they will need to amalgamate the income and expenses with that from their furnished holiday lets and calculate the taxable profit for their property business as a whole.

Following the end of the furnished holiday lettings regime, interest and finance costs in relation to holiday lets are now relieved as a basic rate income tax reduction, rather than by deduction. Capital allowances are no longer available for expenditure on domestic items incurred on or after 6 April 2025; instead, relief is given under the replacement of domestic items rules. However, the landlord can continue to claim writing down allowances where the furnished holiday letting had a balance on a capital allowances pool as at 6 April 2025.

Under the old furnished holiday lettings regime, losses on furnished holiday lets could only be set against future profits from furnished holiday lettings. However, any losses brought forward in respect of holiday lets on 6 April 2025 can be used against the profits of the amalgamated property business, as can losses brought forward in respect of lets other than holiday lets.

Case study

Anna has a flat which she lets out as a residential let and also a cottage near the coast which she lets out as a holiday let. In 2025/26, she received rental income of £8,000 in respect of the flat and rental income of £15,000 from the cottage.

She has a mortgage on the cottage on which she pays interest of £2,300.

Her expenses are as follows:

Expense	Flat	Cottage
Insurance	£300	£500
Cleaning		£3,450
Management fees	£1,000	£500
Gas safety certificate		£150
Repairs and maintenance	£420	£640
Utilities		£960
Mortgage interest		£2,300

She has a loss of £1,100 brought forward in relation to the cottage.

She must amalgamate the costs from the flat and the cottage to calculate her taxable profit.

The total figures should be entered on her tax return as follows:

	£	£
Total rents and other income from property (box 20)		23,000
Rent, rates and insurance (box 24)	800
roperty repairs and maintenance (box 25)	1,060
Legal, management and other professional fees (box 27)	1,500
Cost of services provided, including wages (box 28)	4,410
Other allowable property expenses (box 29)	150
		(7,920)
		15,080

The profit for the year of £15,080 is entered in box 38. The loss brought forward in respect of the former furnished holiday lettings business of £1,100 is entered in box 39 and the taxable profit for the year of £13,980 is entered in box 40.

The residential property finance costs of £2,300 are entered in box 44. Relief is given as a basic rate tax reduction of £460.

Reporting income from FHLs in the 2025/26 tax return - Go Figure Financial | Bookkeeping Services Manchester

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