Budget 2024 Update

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There was plenty going on in the budget but we are looking specifically at the impact on capital allowances, with two main points.

  1. There is a technical consultation on extending full expensing to assets for leasing “Draft legislation on an extension of full expensing to assets for leasing will be published shortly” (Spring Budget 2024).
  2. Abolishing the Furnished Holiday Letting (FHL) tax regime from 6 April 2025.

The technical consultation on extending full expensing to assets for leasing is a really positive step for those currently leasing qualifying Plant & Machinery. At present we cannot provide any update other than to put our thoughts forward to the consultation which will be for the full expensing to extend to assets for leasing in the widest sense and to include lease finance for development costs. We anticipate this method of finance could be more prevalent with the interest rates high at present and appetite to lend slightly lower.

The new legislation on the treatment of Capital Allowances for Furnished Holiday Lets (FHL’s) announced in the 2024 budget is not great news for those owning such properties. There is however a window of opportunity to make claims on FHL’s during the next 12 months providing the criteria set out in HMRC guidance are met. It is therefore essential to utilise this period of opportunity to maximise the tax relief in its current state otherwise the opportunity will be lost.

If you are unsure how this might affect you as an FHL owner we can review your particular situation and assess what impact the Budget 2024 has had on your investment and tax position going forward.