The tax treatment of Furnished Holiday lets (or SAs as you might know them) is changing and from 6th April 2025 they are going to be treated much like any other residential letting. So you will lose so nice tax advantages. You get to keep the VAT charges on the rents however.
The ending of the FHL regime means that all of your residential profits and losses will be netted off against each other from April 25. At the moment you can have a tax bill on residential profits even if you have made a loss on holiday lettings. That will no longer be the case and profits and losses from all residential lets will be pooled. They will become a single class of income.
One good thing is then that anyone carrying losses will be able to use them against other profitable rents BUT only if both sides of the rental business continue after 5th April 2025.
Let’s look at an example. You’ve made a big loss (largely due to set up costs) on a FHL and are carrying £50,000 of losses. You are thinking of packing it in and selling it. You also have a profitable residential property business making well over £50,000 a year.
If you stop letting the FHL March 2025 and sell it 31st March the losses you have will effectively be lost as your FHL business will have ceased. The fact you have other rentals does not matter as for tax purposes they are separate.
If you continue the business until 30th April and sell then you will, from 6th April 2025, be running a new unified business and your losses will be available to offset against your other rental profits. To a higher rate taxpayer that is worth £20,000 in relief.
Of course you have to weigh up the possible increased capital gains tax on the sale and at least a dozen other things but all being equal securing those losses is not a bad idea if it can be done.