Last updated: 14 October 2026
Can you use rollover relief when switching from a furnished holiday let to a buy-to-let?
Not any more for new gains. Rollover relief was one of the special benefits of the furnished holiday lettings (FHL) regime, which was abolished from 6 April 2025 for income tax and capital gains tax. Before then, a gain on selling an FHL could be rolled into a new qualifying business asset, including another FHL, but never into an ordinary buy-to-let. Since April 2025, holiday lets are taxed like other residential lettings, so rollover relief isn’t available for most disposals.
What changed in April 2025
| Relief | Before 6 April 2025 (qualifying FHL) | From 6 April 2025 |
| Rollover relief on reinvestment | Available into qualifying business assets | Not available for holiday lets |
| Business Asset Disposal Relief | Available, subject to conditions | Not available (limited transitional rules) |
| Capital allowances on furniture | Available | Replacement of domestic items relief only |
| Mortgage interest | Fully deductible | 20% tax credit only |
| Pension earnings | Profits counted as relevant earnings | Not counted |
Transitional rules
Anti-forestalling rules apply to unconditional contracts entered into from 6 March 2024 that were completed after 6 April 2025. If you sold an FHL before April 2025, or rolled a gain over before then, the earlier claim stands. If you held an FHL and the business ceased before April 2025, Business Asset Disposal Relief may still apply to a disposal within 3 years of cessation. Check the specific dates with your accountant.
Why buy-to-let never qualified
Rollover relief is for trading assets. An ordinary buy-to-let is an investment, not a trade, so a gain could not be rolled into a buy-to-let even under the old rules.
The tax on a sale today
Gains on residential property are taxed at 18% within the basic-rate band and 24% above it, after the £3,000 annual exempt amount. You must report and pay within 60 days of completion.
Example
Ruth sells a former holiday cottage in July 2026 for £420,000. She bought it for £250,000 and spent £20,000 on an extension. Her gain is £150,000 less £8,000 of sale costs, so £142,000. After the £3,000 exemption, £139,000 is taxable. As a higher-rate taxpayer, she pays 24%: £33,360. She can’t roll the gain into a new buy-to-let.
Planning options now
- Use both spouses’ annual exemptions and tax bands by holding the property jointly
- Time the sale for a year with lower income
- Offset capital losses
- Consider incorporating a large, genuinely business-like portfolio, where incorporation relief may apply (seek advice)
- Gift to family with care: a gift is a disposal at market value
Losses from holiday lets
Unused FHL losses carried forward at April 2025 can be set against profits of your ongoing property business.
Frequently asked questions
Can I still claim capital allowances on holiday let furniture?
Not for new spending. Existing pools can continue to be written down.
Did any relief survive for holiday lets?
Most special treatment ended; ordinary letting rules apply.
Is private residence relief available?
Only for periods when it was your home.
Do I still need to report within 60 days?
Yes, for UK residential property.
Related: can a buy-to-let be exempt from CGT and what landlords can claim.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with capital gains on holiday lets. See our landlord accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
