The Furnished Holiday Lettings (FHL) regime was abolished on 6 April 2025. The favourable tax treatment that made holiday lets attractive — Business Asset Disposal Relief at 10% CGT, full mortgage interest deductibility, capital allowances on fixtures, profits counting toward pension contributions, rollover relief — is gone. For Cornwall holiday-let owners (whose properties make up the second-largest concentration in England after London), the maths has shifted materially. This is the practical exit guide: the tax position now, the limited 3-year transitional window, the property sale logistics, and what to do with the contents — sofas, beds, kitchen kit and welcome packs that filled the typical Cornwall holiday let.

What the FHL abolition actually changed

Before 6 April 2025, FHL properties (qualifying holiday lets meeting the 70-nights-let, 140-nights-available thresholds in England) benefited from:

  • Capital Gains Tax at 10% via Business Asset Disposal Relief (BADR), instead of the standard 24% residential property CGT rate
  • Full mortgage interest deductibility against rental income
  • Capital allowances on fixtures, fittings, white goods and other plant and machinery
  • Holdover relief for gifts
  • Rollover relief for reinvestment in other business assets
  • FHL profits counted as relevant earnings for pension contribution limits

From 6 April 2025, all of these benefits ended. Holiday lets are now taxed as standard residential property businesses with:

  • Standard residential property CGT rates (24% for higher-rate taxpayers, 18% for basic-rate)
  • Mortgage interest relief restricted to 20% basic-rate tax credit (same as standard buy-to-let since 2017-20)
  • No further capital allowance claims on new fixtures
  • No BADR, holdover or rollover relief on disposal
  • Profits don't count toward pension contribution allowance

The 3-year transitional exception

HMRC announced a limited transitional provision: BADR remains available if the FHL business ceased before 6 April 2025 AND the property is disposed of within 3 years of cessation.

This is the only meaningful tax-friendly exit window. For Cornwall holiday-let owners who ceased trading by April 2025:

  • Sale before 6 April 2028 may still qualify for BADR (10% CGT rate)
  • Sale after 6 April 2028 is standard residential CGT (18%/24%)

For owners who continued trading past April 2025: BADR is gone, no transitional relief available. Standard CGT applies to any future sale.

The maths: a worked example

Cornwall holiday-let property:

  • Bought 2010 for £200,000
  • Current 2026 value: £450,000
  • Capital gain: £250,000

Pre-April-2025 sale with BADR

  • Annual CGT allowance: £3,000 (2024-25)
  • Taxable gain: £247,000
  • CGT at 10%: £24,700

Post-April-2025 sale (no BADR, ceased before April 2025, sold by April 2028)

  • If transitional BADR applies: same as above (£24,700)

Post-April-2028 sale (no transitional relief), higher-rate taxpayer

  • Annual CGT allowance: £3,000
  • Taxable gain: £247,000
  • CGT at 24%: £59,280

The difference: £34,580 additional CGT for delayed disposal. For owners with multiple properties, this scales linearly. A 3-property portfolio at the same gain profile = over £100k of additional tax for late disposal.

Who's affected in Cornwall

Cornwall has the second-largest holiday-let concentration in England after London. Estimates suggest 13,000+ properties classified as second homes or holiday lets across the county. Affected owners include:

  • Single-property second-home-with-occasional-letting owners
  • Single-property professional FHL operators
  • Portfolio holders (2-10 properties, often family or partnership-owned)
  • Inherited properties operating as FHLs
  • Properties converted from primary residence to FHL in recent years

Anti-forestalling rules

HMRC introduced anti-forestalling provisions to prevent owners from artificially accelerating disposals to claim BADR before 6 April 2025. Key points:

  • Unconditional contracts entered into before 6 April 2025 but completed after are subject to anti-forestalling rules
  • The contract date alone doesn't preserve old tax treatment
  • Specific HMRC tests apply to assess whether the disposal was genuinely pre-abolition

Owners considering pre-April 2025 disposals should have taken specific tax advice at the time. Post-April 2025, the question is whether the 3-year transitional BADR applies (requires cessation BEFORE 6 April 2025 plus disposal WITHIN 3 years of cessation).

The combined hit: FHL + council tax + SDLT

Cornwall FHL owners face three simultaneous tax/cost increases:

  • FHL abolition (April 2025): CGT 10% → 24%, full interest deductibility → 20% credit, capital allowances stopped
  • Cornwall Council second-home premium (April 2025): 100% extra council tax if not on Business Rates — but FHL abolition makes Business Rates path less attractive
  • SDLT changes (April 2025): 5% surcharge applies to second-home purchases (up from 3% in October 2024) plus the threshold drop adds £2,500 to typical purchases

For owners considering exit, the combined effect is material. The "Cornwall holiday let as investment" thesis that made sense in 2018-22 no longer makes sense for many properties in 2026.

Exit options for Cornwall FHL owners

Option 1: Sell to a primary-residence buyer

The cleanest exit. Buyer is making the Cornwall property their main home; no second-home or FHL complications. You pay CGT at applicable rates (BADR if transitional applies, standard if not). Use proceeds for other investments or property elsewhere.

Market reality: Cornwall property prices are softer than 2022 peaks. ONS data showed -2.6% YoY in late 2025. Pricing realistically rather than aspirationally speeds the sale.

Option 2: Sell to another investor (smaller market)

The buyer pool for "established holiday lets" has shrunk since the FHL abolition. Owners exiting to BTL-investor buyers (who may convert to standard residential let) are typical. Lower price ceiling than primary-residence sales but quicker.

Option 3: Convert to primary residence and move in

If you're approaching retirement or considering Cornwall relocation anyway, moving into the property as primary residence:

  • Eliminates the second-home premium
  • Triggers Private Residence Relief (PRR) for CGT on future sale (partial relief on previous business use)
  • Removes ongoing FHL tax complications
  • Cornwall becomes your home, not your investment

Establishing primary residence is more than moving the kettle — see our moving-to-Cornwall guide for the practical steps (GP, electoral roll, utilities, primary post).

Option 4: Convert to standard buy-to-let

If the property is in a location with sustainable rental demand for residential tenants (Truro, Falmouth student area, towns with local employer base), converting to standard residential let:

  • Avoids the second-home premium (it's a let property)
  • Lower management overhead than holiday let
  • Yields may be lower than peak holiday-let performance but more stable
  • Mortgage interest relief is restricted to 20% credit (same as FHL post-April 2025)

This works in Cornwall towns; less well in remote coastal locations where there's no long-term rental demand.

Option 5: Keep operating, accept the new tax position

For properties with very strong location and high gross yields, continuing as a holiday let even under the new rules can still make commercial sense. Owners who go this route typically:

  • Are on Business Rates (avoiding the second-home premium)
  • Have lower mortgage exposure (interest restriction matters less)
  • Use a management company to keep operations efficient
  • Treat it as a long-hold asset rather than a tax-optimised investment

Option 6: Gift to family

Gifting the property to family is possible but has tax implications:

  • Deemed disposal at market value for CGT (you pay CGT on the gain as if you sold)
  • 7-year rule for IHT (potentially exempt transfer)
  • Holdover relief no longer available post-FHL abolition

Tax adviser essential for this route.

The sale logistics: what's involved

1. Tax planning first

Before listing: speak to an accountant familiar with Cornwall property taxation. Calculate the CGT position under different scenarios. If transitional BADR applies, structure the sale to capture it. If it doesn't, standard CGT applies — but timing within the tax year may still matter.

2. Estate agent selection

Cornwall estate agents with FHL/holiday-let experience are best for these sales. They understand:

  • The contents-included sale model (often used for holiday lets)
  • Pricing in a softening market
  • Buyer pool — primary residence buyer vs investor

3. Decide: contents in or out

FHLs are typically sold furnished. Options:

  • Contents included in sale price. Cleanest, often appeals to investor buyers wanting turnkey. Add £5,000-£25,000 to the price depending on quality and quantity of contents.
  • Contents sold separately to buyer. Useful when primary-residence buyer doesn't want all the contents — they take what they want, you dispose of the rest.
  • Contents removed before sale. Sell empty; you handle disposal separately. Most flexibility but most work.

4. Contents disposal

If contents are going (not included with sale):

  • Resell to other FHL operators. Facebook Marketplace, Cornwall holiday-let owner groups, dedicated resale networks. Mid-range mid-condition furniture sells for 20-40% of original retail.
  • Auction. Cornwall auction houses (Lay's of Penzance, Bonhams, David Lay Fine Art) handle higher-value items.
  • Charity donation. British Heart Foundation furniture (Truro), Cornwall Hospice Care, Children's Hospice South West collect quality furniture.
  • House clearance firm. £600-£1,500 for a typical 3-bed holiday let clearance. See our house clearance guide.

5. The actual move-out

If you have items being moved (not disposed) — owner's furniture, fittings being transferred to another property, personal items — book a removal company. The volume is typically smaller than a primary-residence move, and destinations are often up-country to the owner's main address.

Cornwall removers familiar with FHL exits include several local firms now offering combined removal-and-clearance services. Request quotes via our quote form.

Common Cornwall FHL exit scenarios

Scenario A: London-based owner, single Cornwall coastal property

Bought 2015 for £350,000, current value £550,000. Operated as FHL, ceased trading March 2025. Selling 2026 with transitional BADR. Contents: £15,000 of furnishings and white goods.

Plan: Estate agent sale priced realistically (£525,000 to encourage offers). Contents included to attract investor buyer. CGT planning with accountant captures BADR. Furniture left in situ.

Scenario B: Cornwall-resident owner, 3-property portfolio

Properties in St Ives, Falmouth and Padstow. Strong local management. Ceased FHL trading April 2025; converted Padstow to standard residential let (yields acceptable), selling St Ives and Falmouth.

Plan: Sequential disposal over 18 months to manage CGT. Furniture from St Ives moved to Falmouth as backup contents; remaining items auctioned. Cornwall-internal removal firm handles three-stage move.

Scenario C: Inherited Cornwall holiday let

Probate property, three siblings as beneficiaries. None want to operate as FHL. Property valued for probate £325,000; expected sale £340,000.

Plan: House clearance firm engaged for contents (£800-£1,200 typical). Property sold empty as primary residence to local buyer. Modest CGT (small gain since probate valuation). Removal not needed; siblings handle personal sentimental items.

Scenario D: Self-managed full-time-FHL owner downsizing

Owner approaching retirement, decided to exit FHL and downsize to a Truro bungalow. Selling holiday let and primary residence; buying smaller property.

Plan: Two-stage sale (holiday let first, primary residence second). Move into new bungalow with primary-residence contents only; holiday-let contents sold via Facebook Marketplace and auction. Full-service removal company handles the bungalow move.

The 2026 holiday-let registration scheme

From April 2026, England's holiday-let registration scheme launches. All short-term lets must register on a central government database with a unique registration number displayed on all listings (Airbnb, Booking.com, Vrbo, owner websites). Initial phase is voluntary; mandatory later.

For owners who are continuing to operate, registration adds another compliance layer (alongside FHL abolition, council tax premium, SDLT changes, and the proposed Use Class C5 with Article 4 directions). For owners exiting, it's one more piece of evidence that the regulatory direction is increasingly demanding.

What estate agents are seeing in 2026

Anecdotally from Cornwall coastal estate agents:

  • Increased FHL/second-home listings, particularly in Padstow, Fowey, Mevagissey, St Ives, Polperro
  • Slightly softer prices than 2022-24 peak
  • Shift toward primary-residence buyers in coastal markets (helped by softer prices)
  • Longer marketing times for properties priced as if still 2022
  • Some investor buyers still active for properties in strong year-round demand locations

Professional advice — essential

This guide outlines the FHL abolition consequences and the typical exit options. Every owner's tax position is different — capital gain size, marginal tax rate, property value, business history, intended use of proceeds — and the tax landscape continues to evolve. Professional advisers worth engaging:

  • Tax accountant specialising in property businesses. Cornwall has several (PKF Francis Clark, Bishop Fleming, RRL, plus boutique firms in Truro and Falmouth).
  • Conveyancing solicitor experienced with FHLs. The legal sale documentation can be more complex for properties with business history.
  • Financial adviser if proceeds will fund retirement or investments.
  • Estate agent with FHL experience. Cornwall coastal agents have plenty of recent experience post-April 2025.

Ready to plan the exit?

For removal and clearance needs, submit your details for fixed-price quotes from vetted Cornwall removers. Many of our partners offer combined removal-and-clearance services for FHL exits. See also:

This guide is for general information only and is not tax, financial or legal advice. Tax rules and HMRC interpretations can change. Speak to a qualified tax adviser and conveyancing solicitor for advice on your specific circumstances.