(UK) — The main tax split for landlords is now between ordinary residential investment gains, usually taxed at 18% or 24%, and gains that once qualified for Business Asset Disposal Relief, taxed at 10%.

That distinction has sharpened since the higher residential CGT rate fell from 28% to 24% on 6 April 2024. A lower headline rate reduced the tax cost of selling. It also gave some owners a reason to bring sales forward rather than wait.

The second change hit furnished holiday lets. The furnished holiday lettings regime ended on 5 April 2025. That removed a set of tax advantages that had made some short-term rental properties look more like trading businesses than standard buy-to-lets.

Timing now matters more than broad market views. A landlord with a large accrued gain, a small annual exemption, and higher-rate income can face a very different bill depending on whether the property sale happened before or after a relief disappeared.

The annual capital gains tax exemption is another pressure point. It dropped to £3,000 for 2024/25, down from £6,000 in 2023/24. That change narrowed the value of waiting, because less of the gain can be sheltered each year.

As of Wednesday, June 10, 2026, these rule changes are no longer speculative. They are already in effect. Landlords filing returns in tax year 2026, with returns filed in 2027, are dealing with a market reshaped by those earlier dates.

📅 Deadline Alert: 6 April 2024 cut the higher residential CGT rate to 24%. 5 April 2025 ended the furnished holiday lettings regime. 6 April 2025 removed BADR access for former qualifying furnished holiday lets.

The ordinary residential rules are simpler, but not always cheaper. A basic-rate taxpayer may pay 18% on some or all of the gain. A higher-rate taxpayer usually pays 24%. The seller’s income position decides which part of the gain falls into each band.

A quick example shows the gap. Assume a landlord has a £100,000 gain after allowable costs. Subtract the £3,000 annual exemption. A gain of £97,000 taxed at 24% produces £23,280 of CGT. The same qualifying gain at 10% would produce £9,700.

That spread explains why some owners chose to bring sales forward before 6 April 2025. The lower residential rate helped everyone at the top end. The loss of BADR treatment hit a narrower group, but the difference was much larger.

Landlords often make one mistake first: they assume the higher residential CGT rate cut made waiting harmless. It did not. A cut from 28% to 24% reduced tax, but it did not replace reliefs lost with the end of the furnished holiday lettings regime.

The second mistake is treating all holiday rentals as furnished holiday lets for tax purposes. The old regime had conditions. A property generally needed to meet letting and availability tests. A second home used only occasionally by paying guests did not automatically qualify.

The third mistake is ignoring income bands. A landlord near the basic-rate threshold can have part of a gain taxed at 18% and the balance at 24%. That makes the wider tax year picture important, especially if salary, dividends, or pension withdrawals changed.

⚠️ Warning: A property that stopped qualifying as a furnished holiday let after 5 April 2025 does not retain BADR access simply because it qualified earlier. The disposal date matters.

Investor visa holders and internationally mobile owners have another layer to check. A UK property gain can sit alongside tax residence issues in another country. Double tax relief, reporting timing, and exchange rates can affect the final bill. That matters for owners moving funds across borders after a sale.

Transfers within families also need care. A transfer to a spouse or civil partner can be tax-efficient in some cases, but the timing matters. A late transfer done after exchange is unlikely to shift the gain as intended. Documentation, beneficial ownership, and contract dates all matter.

A practical review for tax year 2026 starts with three questions. Was the property ever a genuine furnished holiday let under the old rules? What is the estimated gain after costs and the £3,000 exemption? Where does the seller’s taxable income place them between 18% and 24%?

Landlords still holding former furnished holiday lets should also revisit business plans. The tax treatment is no longer the same as it was before 6 April 2025. Sale timing, incorporation ideas, and transfer planning need fresh calculations, not assumptions based on older guides.

The cleanest next step is a dated timeline. Mark 6 April 2024 for the rate cut, 5 April 2025 for the end of the furnished holiday lettings regime, and 6 April 2025 for the BADR change. Then match each property against those dates, estimated gain, and income band before listing it for sale.

You are generally better placed to sell sooner if the gain is already large, the property once depended on furnished holiday letting treatment, and waiting offers no commercial upside. You are more likely to hold if the property never qualified for BADR, the gain is modest, and part of it still falls into the 18% band.

⚠️ Disclaimer: This article is for informational purposes only and does not constitute tax, legal, or financial advice. Tax situations vary based on individual circumstances. Consult a qualified tax professional or CPA for guidance specific to your situation.