Furnished Holiday Lets: Critical Tax Changes from April 2025

by Leah McGarvey | 27 Mar, 2025 | Property, Tax

Furnished Holiday Lets: Critical Tax Changes from April 2025

Major changes to furnished holiday let tax rules will come into effect from April 2025. These furnished holiday let changes will remove the special status that such properties have enjoyed for decades.

Understanding these furnished holiday lets tax changes is essential for anyone who owns or operates such properties.

Key Changes to Furnished Holiday Lets Tax

The following changes have been proposed:

Finance Cost Restriction

Applying the finance cost restriction rules means that loan interest will be restricted to basic rate for Income Tax. This aligns with the treatment of residential buy-to-let properties.

Capital Allowances Changes

The new rules remove capital allowance rules for new expenditure. They allow replacement of domestic items relief instead.

Any unused capital allowance pool can be carried forward and writing down allowances claimed each year.

This represents a significant shift in how owners can claim tax relief on items within the property.

Withdrawal of Capital Gains Tax Reliefs

The changes withdraw access to Business Asset Disposal Relief (formerly Entrepreneurs’ Relief).

Pension Contributions Impact

FHL income will no longer be included within relevant UK earnings when calculating maximum pension relief. This could affect how much some owners can contribute to their pensions.

Losses

Any losses incurred by the FHL in the current year or carried forward from previous years will be treated as losses of the ongoing UK or Overseas property business going forward. This means the losses can be set off against other property income for individuals, or against other income for companies in the following year.

Planning Considerations

If you currently operate furnished holiday lets, you should consider:

Whether to dispose of properties before the rules change
The impact on your pension contribution capacity

How We Can Help with Furnished Holiday Lets Tax

At Lewis Brownlee, our property tax specialists can help you:

Navigate these significant furnished holiday lets tax changes
Assess whether accelerating disposal before April 2025 would be beneficial
Understand the tax impact of these changes on your specific properties

Contact us today to discuss how these furnished holiday lets tax changes might affect your property investments and what steps you can take to prepare.

Author Bio

Lewis Pridgeon | Tax Compliance Manager

Lewis joined the tax team in 2013 and has since become a full member of the Association of Taxation Technicians. He has extensive knowledge across many areas of tax and accountancy, with a particular focus on personal tax clients. Lewis has developed expertise in advising non-resident landlords and specialises in agricultural and horticultural tax planning.

Let us guide you through the details and help you prepare for what lies ahead. Contact us for expert advice on your tax matters.

If you’d like to speak to one of our experts, please call 01243 782 423. Alternatively, please email us from our contact page and we will be in touch!

We also update our YouTube channel regularly with new content, see here: Lewis Brownlee YouTube

Maximising Your Pension Contributions: Essential Guide for Tax Year 2024-25

by Leah McGarvey | 14 Mar, 2025 | Pension, Tax

Maximising Your Pension Contributions: Essential Guide for Tax Year 2024-25

Optimising your pension contributions is one of the most tax-efficient ways to save for retirement. Making the most of available pension contribution allowances can significantly reduce your current tax liability while building your future financial security.

Understanding the rules around pension contributions is essential for effective tax planning.

Annual Pension Contribution Limits

You may contribute up to £60,000 (gross) in the 2024-25 tax year into a pension fund. This includes any employer pension contributions made on your behalf.

Additionally, you may benefit from carrying forward any unused pension annual allowances from the three previous tax years.

High-Income Restrictions

If your taxable income exceeds £260,000, your annual pension allowance will begin to be reduced. This is subject to a restricted minimum of £10,000.

It’s worth calculating your available pension allowances if this applies to you. Exceeding the permitted limit may result in the excess being taxable at 45%.

Considerations for Those Already Drawing Pensions

For those who have already begun drawing their pension (including flexi-drawdown), the annual pension allowance is reduced to only £10,000 (gross).

Lifetime Allowance Changes

There is no lifetime allowance as this was abolished from 6th April 2024. However, during the 2024 Autumn Budget, the Chancellor announced that unused pension savings will have to be included in the death estate. This means they potentially become subject to Inheritance Tax.

This represents a significant change that could affect estate planning for many individuals.

How We Can Help with Pension Contributions

At Lewis Brownlee, our pension planning experts can help you:

Calculate your maximum available pension contributions allowance
Utilise carry forward provisions effectively
Structure contributions to maximise tax relief
Understand how recent changes to pension rules affect your retirement planning
Integrate pension planning with your wider tax and estate planning

Contact us today to ensure you’re making the most of your pension contributions before the tax year ends.

Author Bio

Lewis Pridgeon | Tax Compliance Manager

Lewis joined the tax team in 2013 and has since become a full member of the Association of Taxation Technicians. He has extensive knowledge across many areas of tax and accountancy, with a particular focus on personal tax clients. Lewis has developed expertise in advising non-resident landlords and specialises in agricultural and horticultural tax planning.

Let us guide you through the details and help you prepare for what lies ahead. Contact us for expert advice on your tax matters.

If you’d like to speak to one of our experts, please call 01243 782 423. Alternatively, please email us from our contact page and we will be in touch!

We also update our YouTube channel regularly with new content, see here: Lewis Brownlee YouTube

Capital Gains Tax: Essential Changes for 2024-25 and Beyond

by Leah McGarvey | 12 Mar, 2025 | Property, Tax

Capital Gains Tax: Essential Changes for 2024-25 and Beyond

The landscape of capital gains tax changes has evolved significantly over recent months. These capital gains tax changes have major implications for property investors and business owners planning asset disposals in the coming tax year.

Understanding these capital gains tax changes is crucial for effective tax planning, especially with the significant rate increases that came into effect from October 2024.

Capital Gains Tax Allowance

The annual capital gains tax allowance for the 2024-25 tax year is set at £3,000. This means any chargeable gains equal to or less than this amount should not give rise to a tax liability.

For the 2025-26 tax year, the capital gains allowance will remain at £3,000.

Recent Changes to Capital Gains Tax Rates

As you may be aware, several rates for capital gains have changed. The current rates are as follows:

	From 6th April 2024 to 29th October 2024	From 30th October 2024	2025-26
Non-Residential Property Gains – Basic Rate	10%	18%	18%
Non-Residential Property Gains – Higher Rate	20%	24%	24%
Residential Property Gains – Basic Rate	18%	18%	18%
Residential Property Gains – Higher Rate	24%	24%	24%
Business Asset Disposal Relief (BADR)	10%	10%	14%
Carried Interest – Basic Rate	18%	18%	32%
Carried Interest – Higher Rate	28%	28%	32%

Planning for Business Asset Disposal Relief

The rate of Business Asset Disposal Relief will increase significantly from 6th April 2026, rising from 10% to 14%. This represents an important consideration for business owners contemplating a sale.

If you’re considering disposing of business assets, it might be worthwhile accelerating any planned disposals. Prior to taking action, you’ll need to consider various other factors in the round.

How We Can Help with Capital Gains Tax Changes

At Lewis Brownlee, our expert tax advisers are up-to-date with all capital gains tax changes. We can help you:

Assess the impact of these changes on your specific circumstances
Develop strategies to optimise your tax position
Time disposals to maximise available reliefs
Consider alternative structures that might be more tax-efficient

With offices in Chichester, Midhurst and Whiteley, our team of Chartered Accountants and Tax Advisers is perfectly positioned to support clients across the South Coast with navigating these significant capital gains tax changes.

Contact us today to discuss how these changes might affect you and what steps you can take to prepare.

☎️ Chichester: 01243 782 423 ☎️ Midhurst: 01730 817 243 ☎️ Whiteley: 01489 287 782

Author Bio

Lewis Pridgeon | Tax Compliance Manager

Lewis joined the tax team in 2013 and has since become a full member of the Association of Taxation Technicians. He has extensive knowledge across many areas of tax and accountancy, with a particular focus on personal tax clients. Lewis has developed expertise in advising non-resident landlords and specialises in agricultural and horticultural tax planning.

Let us guide you through the details and help you prepare for what lies ahead. Contact us for expert advice on your tax matters.

If you’d like to speak to one of our experts, please call 01243 782 423. Alternatively, please email us from our contact page and we will be in touch!

We also update our YouTube channel regularly with new content, see here: Lewis Brownlee YouTube

Changes to the Tax Rules for Non-Domiciles

by Leah McGarvey | 21 Feb, 2025 | Tax

Changes to the Tax Rules for Non-Domiciles

Understanding Domicile and Its Tax Implications

The UK tax system has long allowed individuals to be taxed differently depending on their domicile status. This has provided opportunities for non-domiciled taxpayers to make tax savings on overseas income and assets. However, from 6 April 2025, significant changes to the tax rules for non-domiciles will take effect, replacing the current system with a residence-based approach.

What Is Domicile?

Domicile refers to an individual’s permanent home and is distinct from nationality, residence, or citizenship. It is typically acquired at birth from the individual’s father (or mother if the father is unknown). While it is possible to change domicile, this generally requires moving to another country and severing ties with the previous one.

Current Tax Implications of Domicile

Domicile status has played a key role in both Income Tax and Inheritance Tax (IHT):

Income Tax:
- UK residents who are UK domiciled are taxed on their worldwide income as it arises.
- UK residents who are non-UK domiciled can opt for the remittance basis, meaning they only pay UK tax on income brought into the UK.
Inheritance Tax (IHT):
- UK domiciled individuals are subject to IHT on their worldwide estate.
- Non-UK domiciled individuals only pay IHT on UK assets.

Changes to the Tax Rules for Non-Domiciles

From 6 April 2025, the concept of domicile for tax purposes will be abolished, and a residence-based system will be introduced.

Changes to Income Tax

The remittance basis will be scrapped and replaced with a new 4-year Foreign Income and Gains (FIG) regime.
Individuals who move to the UK after at least 10 years of non-UK residence will not pay tax on foreign income and gains for their first four tax years.
After the four-year period, they will be taxed on their worldwide income and gains like any other UK resident.
Those who have already been UK resident for less than four years (following 10 years of non-UK residence) as of 6 April 2025 can use the FIG regime for any remaining qualifying years.

The Temporary Repatriation Facility (TRF)

This facility allows individuals who previously used the remittance basis to remit untaxed foreign income and gains at a lower tax rate.
The tax rate on designated funds will be:
- 12% for 2025–26 and 2026–27
- 15% for 2027–28
Individuals can choose when to remit designated amounts to the UK, even after the TRF window closes.

Changes to Overseas Workdays Relief (OWR)

OWR will continue but will be based on residence and limited to four years.
An annual cap will apply, set at the lower of:
- 30% of qualifying employment income, or
- £300,000 per tax year.

Changes to Inheritance Tax

From 6 April 2025, a residence-based IHT system will apply.
Individuals who have been UK resident for at least 10 of the past 20 tax years will be classified as Long-Term Residents.
Long-Term Residents will be subject to IHT on their worldwide assets, similar to UK-domiciled individuals.
A “tail provision” means this IHT liability continues for up to 10 years after an individual leaves the UK, depending on their period of UK residence.

How We Can Help

These changes to the tax rules for non-domiciles mark a fundamental shift in the UK tax system. If you are a non-domiciled individual, it is essential to review your tax position ahead of April 2025.

At Lewis Brownlee, our tax specialists can help you:

Understand how these changes affect your personal tax situation.
Plan for the transition to a residence-based system.
Explore tax-efficient ways to manage foreign income, remittances, and inheritance planning.

If you need expert advice on navigating the new tax rules for non-domiciles, get in touch with our team today.

Author Bio

Tom Foster – Tax Director

Tom is the Head of Taxation at Lewis Brownlee. Having joined the firm from a top 20 accountancy practice in March 2014. His expertise and dedication led to his promotion to Tax Director in April 2017. With over 25 years of experience as a general tax practitioner, Tom has a wealth of knowledge in assisting both individuals and businesses to manage their tax affairs efficiently and legally.

Tom’s areas of expertise include Capital Gains Tax, Inheritance Tax Planning, EMI Share Schemes, Property Taxation, Personal Tax Planning, EIS and SEIS, Trusts and Estates, Research & Development, and Tax Investigations.

Let us guide you through the details and help you prepare for what lies ahead. Contact us for expert advice on your tax matters.

If you’d like to speak to one of our experts, please call 01243 782 423. Alternatively, please email us from our contact page and we will be in touch!

We also update our YouTube channel regularly with new content, see here: Lewis Brownlee YouTube

Understanding Enterprise Investment Scheme Relief (EIS)

by Leah McGarvey | 3 Feb, 2025 | Tax

Understanding Enterprise Investment Scheme Relief (EIS)

Enterprise Investment Scheme (EIS) relief was introduced to encourage investment in smaller, private British businesses. To support this, several tax incentives are available, making EIS an attractive option for investors.

What tax reliefs are available?

The Enterprise Investment Scheme relief offers several tax advantages, including:

Income Tax Relief

The main benefit is a 30% income tax reducer. This can be claimed in the year of investment or carried back to the previous tax year. However, EIS relief cannot be carried forward.

The maximum investment that qualifies for tax relief is £1 million per tax year.

Capital Gains Tax (CGT) Exemption

If EIS shares are held for at least three years before being sold, any gains made on them are free from CGT. However, income tax relief must have been claimed on these shares, and the relief must not have been withdrawn.

CGT Deferral Relief

Capital gains made on other assets can be deferred if the proceeds are reinvested into EIS shares. This applies if the investment was made within one year before disposal or up to three years after.

For sales made after 30 October 2024, the CGT rate on these deferred gains will be:

24% for higher-rate taxpayers
18% for basic-rate taxpayers

EIS Loss Relief

If EIS shares result in a loss, investors can offset this loss against their income tax instead of CGT. The loss relief is calculated after deducting any previously claimed 30% income tax reducer.

Inheritance Tax (IHT) Relief

EIS shares held for at least two years at the time of death can qualify for 100% relief from Inheritance Tax (IHT) up to 5 April 2026. After this date, up to £1 million will still qualify for 100% relief, with the excess benefiting from 50% relief—resulting in an effective IHT rate of 20%.

Seeking professional advice on EIS relief

While Enterprise Investment Scheme relief offers valuable tax benefits, there are specific conditions that must be met to claim these reliefs. If you are considering investing in EIS shares or have already done so, our tax specialists can help ensure you maximise the available reliefs.

We provide expert tax advice, ensuring that you navigate EIS relief effectively. Please get in touch to discuss how we can assist you.

Please note: This blog only considers the tax implications of EIS investments and does not constitute investment advice.

Author Bio

Tom Foster – Tax Director

Tom is the Head of Taxation at Lewis Brownlee. Having joined the firm from a top 20 accountancy practice in March 2014. His expertise and dedication led to his promotion to Tax Director in April 2017. With over 25 years of experience as a general tax practitioner, Tom has a wealth of knowledge in assisting both individuals and businesses to manage their tax affairs efficiently and legally.

Tom’s areas of expertise include Capital Gains Tax, Inheritance Tax Planning, EMI Share Schemes, Property Taxation, Personal Tax Planning, EIS and SEIS, Trusts and Estates, Research & Development, and Tax Investigations.

Let us guide you through the details and help you prepare for what lies ahead. Contact us for expert advice on your tax matters.

If you’d like to speak to one of our experts, please call 01243 782 423. Alternatively, please email us from our contact page and we will be in touch!

We also update our YouTube channel regularly with new content, see here: Lewis Brownlee YouTube

Late Payment Interest: What You Need to Know

by Leah McGarvey | 30 Jan, 2025 | Tax

Late Payment Interest: What You Need to Know

The Government announced in the Budget that late payment interest charges will increase from 6th April 2025. Currently, HMRC applies an interest charge of 2.5% above the base rate on outstanding tax liabilities. This will rise by 1.5%, bringing the new rate to 8.75%, up from 7.25%.

With late payment interest increasing, taxpayers should ensure they meet their deadlines to avoid unnecessary costs.

The Impact of Late Payment Interest

Late payment interest can accumulate quickly, resulting in significant additional costs. A common reason for late tax payments is that taxpayers are unaware of their liability, often because they leave their tax return until the last minute.

If you are unsure how much tax you will need to pay in January, it is best to complete your tax return early. This gives you time to plan and arrange payments, avoiding unexpected financial strain.

Reducing Payments on Account – Proceed with Caution

Some taxpayers choose to reduce their payments on account to lower their immediate outgoings. However, if these payments are reduced too much, late payment interest charges will apply. Careful planning is essential to avoid unexpected interest costs.

Executors and Inheritance Tax

Executors handling estates should also be mindful of late payment interest. Those paying inheritance tax via instalments can be exposed to additional charges. Where possible, clearing tax liabilities quickly can help minimise costs. Instalment payments should only be used when absolutely necessary.

Should You Consider a Loan to Cover Tax Payments?

In some cases, taking out a short-term loan to cover a tax payment may be worth considering. If the interest rate on the loan is significantly lower than HMRC’s late payment interest, this could be a more cost-effective option.

How We Can Help

With tax rates already high, avoiding unnecessary interest charges is crucial. Our expert tax team can help you manage your tax liabilities efficiently, ensuring you meet deadlines and minimise costs.

If you have any questions or need assistance with your tax payments, speak to a member of our tax team today.

☎️ Chichester: 01243 782 423 ☎️ Midhurst: 01730 817 243 ☎️ Whiteley: 01489 287 782

Author Bio

Tom Foster – Tax Director

Tom is the Head of Taxation at Lewis Brownlee. Having joined the firm from a top 20 accountancy practice in March 2014. His expertise and dedication led to his promotion to Tax Director in April 2017. With over 25 years of experience as a general tax practitioner, Tom has a wealth of knowledge in assisting both individuals and businesses to manage their tax affairs efficiently and legally.

Tom’s areas of expertise include Capital Gains Tax, Inheritance Tax Planning, EMI Share Schemes, Property Taxation, Personal Tax Planning, EIS and SEIS, Trusts and Estates, Research & Development, and Tax Investigations.

Let us guide you through the details and help you prepare for what lies ahead. Contact us for expert advice on your tax matters.

If you’d like to speak to one of our experts, please call 01243 782 423. Alternatively, please email us from our contact page and we will be in touch!

We also update our YouTube channel regularly with new content, see here: Lewis Brownlee YouTube