If you and your spouse or civil partner own a Furnished Holiday Let (FHL) property together, you may be familiar with the current rules that allow you to split the income from the property in whatever proportion you choose. However, changes coming in April 2025 could affect how you manage your property income and tax obligations.
What’s Changing for FHL Owners?
Currently, if you and your spouse/civil partner own an FHL, you can share the income in any way that works for you - there’s no need to alter the ownership structure of the property. But starting on 6 April 2025, many of the favourable tax rules for FHLs will be abolished, including the ability for flexible income splitting of these properties.
From 6 April 2025, the rules will default to those used for normal residential property lets, whereby the rental income for married couples or civil partners (who jointly own property) must be split equally 50:50 for income tax purposes, unless a declaration is made to HM Revenue & Customs (HMRC) to report this in line with the beneficial ownership of the property.
To split income unequally from 6 April 2025, you’ll firstly need to make sure that the beneficial property ownership reflects the share of income you wish to receive through a declaration of trust. Then, you'll have to submit a Form 17 to HMRC within 60 days of making any changes, along with evidence of the beneficial ownership.
If you fail to submit the form on time, HMRC will assume you’re splitting the income equally (50:50), which could lead to unintended tax consequences.
Potential Stamp Duty Land Tax (SDLT) Implications
If you intend to change the beneficial ownership of the property, you will need to take advice from a solicitor.
Changing the beneficial ownership of a property might trigger Stamp Duty Land Tax (SDLT) if there’s a significant mortgage on the property. SDLT is typically a tax applied when buying property, but it can also come into play when ownership is altered, even if no money is changing hands.
Before 6 April 2025, there’s a higher SDLT threshold, which means that there’s more flexibility to change the ownership of your FHL property without incurring a large SDLT bill. If you’re planning to split the income unequally with your partner, this might be a good time to make changes to the ownership structure, while the SDLT rules are more lenient.
After 6 April 2025, these opportunities could be reduced, and making ownership changes may become more costly.
The SDLT rules will apply to the purchase of property in England and Northern Ireland. The tax is different if the property is in Scotland, where land transactions are subject to ‘Land and Buildings Transaction Tax’ (LLBT) and Wales, where land transactions are subject to ‘Land Transaction Tax’ (LTT).
Final Thoughts: Plan Ahead Before April 2025
If you own a Furnished Holiday Let (FHL) with your spouse or civil partner, and you plan to split the rental income unequally, it’s important to start planning before the changes take effect on 6 April 2025.
From that date, you’ll need to change the beneficial ownership of the property and submit Form 17 to HMRC if you want to allocate income in a way that doesn’t follow the 50:50 default split.
The window of opportunity for making these changes with fewer tax implications is closing, especially when it comes to potential Stamp Duty Land Tax (SDLT) charges. So, if you’re thinking about transferring ownership to make things more tax-efficient, it’s best to act before April 2025.
As always, it’s a good idea to consult with a tax professional to ensure you fully understand the new rules and how they apply to your specific situation.
By planning ahead and understanding the changes, you can ensure that you’re managing your property income in the most tax-efficient way possible, both now and in the future.
If you need to speak to one of our specialists
Get in touchRelated news

Budget announcement will affect tax treatment of furnished holiday lettings
Diversification has been key for farming businesses to remain sustainable; having a number of different income streams on the farm has helped many businesses navigate through external factors and changes in farm subsidy regimes.

The abolition of Furnished Holiday Lettings Relief: A turning point for holiday let owners
There has been a long-standing practice, which has been in existence for over 40 years, that has granted furnished holiday homes beneficial tax treatment compared to other residential property landlords.
Related events

Spring Statement briefing and discussion
We are pleased to invite you to join us for our Spring Statement briefing and discussion at Bawburgh Golf Club on Thursday 27 March.

Spring Statement briefing - Thetford
We are pleased to invite you to join us for our Spring Statement briefing at Thetford Garden Centre on Tuesday 1 April.