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D8
Holiday Let: Continue vs Convert to AST vs Sell
FHL regime abolished April 2025. Three exits, all worth modelling.
Compare your options
Continue as short-let
Pros
- Keeps high-season income
- Personal use possible
Cons
- Lost FHL tax perks (capital allowances, pension, CGT reliefs)
- Section 24 now applies
Best for: Genuinely seasonal locations with strong year-round demand.
Convert to AST
Pros
- Stable income
- Lower management
- Renters' Rights Act protections apply
Cons
- Lower gross income
- May not match local AST market
- Limited scope to use yourself
Best for: Suburban/town locations where the property suits family life.
Sell
Pros
- Avoid hybrid tax position
- Crystallise gains
- Redeploy capital
Cons
- CGT now
- Lose income
Best for: Marginal short-let locations or where lifestyle change makes sense.
Worked scenarios
Cornwall cottage, £25k gross, 30% costs
| Option | Outcome |
|---|---|
| Continue | Still profitable but tax bill rises notably. |
| AST | Income drops 40–50% but stable. |
| Sell | Worth modelling if EPC or capex issues loom. |
Decision checklist
- Compare 12-month projected AST rent vs short-let net.
- Model the tax differences post-FHL abolition.
- Check capital allowances disposal implications.
- Check mortgage permits AST use.
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