Skip to main content

Holiday Let Capital Allowances

Furnished holiday lets are among the most asset-rich properties, with embedded kitchens, bathrooms, heating systems, and outdoor installations. Yet most holiday let owners miss thousands in unclaimed tax relief.

Get Free Assessment Contact Us
25-40%
Of Property Value Claimable
£45,000
Average Holiday Let Claim
6-8
Weeks to Completion

The Embedded Assets Opportunity in Holiday Lets

When you purchased your holiday let, you didn't just buy a building - you bought a property packed with embedded fixtures and fittings that qualify for capital allowances. From the moment you acquired the property, these assets have been sitting there, waiting to be claimed.

The challenge? Most holiday let owners (and their accountants) only claim capital allowances on moveable items like furniture and appliances. They completely miss the embedded assets - the fixtures permanently attached to the building that often represent the largest portion of claimable value.

These embedded assets include everything from fitted kitchens and bathroom suites to heating systems, electrical infrastructure, and outdoor installations. They're the fixtures that make your holiday let attractive to guests, but they're also the assets that can unlock significant tax relief.

The good news is that if you haven't previously claimed on these embedded assets, you can likely claim retrospectively - potentially going back years and recovering tax relief you've been missing out on.

What Qualifies in Your Holiday Let?

Kitchen Installations

£8,000 - £25,000
Fitted kitchen units and worktops
Built-in appliances (oven, hob, extractor)
Plumbing connections
Electrical installation
Kitchen lighting
Tiling and splashbacks

Bathroom Fittings

£5,000 - £15,000 per bathroom
Bathroom suites
Shower enclosures and wet rooms
Heated towel rails
Bathroom extraction fans
Tiling and waterproofing
Plumbing connections

Heating & Hot Water

£6,000 - £20,000
Boiler and heating system
Radiators
Underfloor heating
Hot water cylinder
Heating controls
Pipework and installation

Electrical Systems

£3,000 - £10,000
Consumer unit and distribution
Wiring and circuits
Lighting installation
Smoke and CO detectors
External lighting
EV charging points

Fire & Safety

£1,000 - £5,000
Fire detection systems
Emergency lighting
Fire doors
Escape signage
Fire extinguisher housings

External Works

£2,000 - £15,000
Hot tub installations
Garden lighting
Decking and patios
Fencing and gates
Drainage systems
External power points

Why Holiday Lets Are Asset-Rich

Unlike standard buy-to-let properties, furnished holiday lets require:

Quality kitchens

Premium fitted kitchens with integrated appliances, granite worktops, and high-spec installations that holiday let guests expect - far beyond standard rental properties.

Premium bathrooms

Multiple en-suite bathrooms, luxury fixtures, heated towel rails, and spa-like features that justify premium holiday let rates and guest reviews.

Reliable heating

Underfloor heating, smart thermostats, and premium heating systems essential for year-round bookings - features standard rentals rarely include.

Safety systems

Comprehensive fire safety systems, CO detectors, and emergency lighting required by holiday let regulations - more extensive than standard rental requirements.

Outdoor amenities

Hot tubs, saunas, outdoor kitchens, and premium garden installations that create the 'wow factor' holiday let guests pay premium rates for.

Electrical systems

Enhanced electrical infrastructure including outdoor lighting circuits, EV charging points, and smart home systems that differentiate holiday lets from basic rentals.

All of these contain embedded assets that most accountants overlook.

The Embedded Assets Your Accountant Misses

Your accountant likely claims capital allowances on:

  • Furniture and soft furnishings
  • Kitchen appliances (freestanding)
  • TVs and electronics
  • Outdoor furniture

But they're probably missing:

  • Fitted kitchen installations (£8,000-£25,000)
  • Bathroom suites and installations (£5,000-£15,000 each)
  • Heating systems (£6,000-£20,000)
  • Hot tub installations (£3,000-£10,000)
  • Electrical infrastructure (£3,000-£10,000)
  • Fire safety systems (£1,000-£5,000)

These embedded assets typically represent 25-40% of your property's value.

Case Study

Case Study: Lake District Holiday Cottage

3-bedroom furnished holiday let

Purchase Price
£425,000
Embedded Assets
£142,000
Tax Relief Secured
£27,000

Key Embedded Assets Identified

Hot tub installation and associated infrastructure (£15,000)
Fitted kitchen with integrated appliances (£32,000)
Premium bathroom suites (3 en-suites + family bathroom) (£42,000)
Underfloor heating system throughout (£22,000)
Electrical infrastructure and lighting systems (£18,000)
Fire safety and security systems (£13,000)

Holiday Let Capital Allowances FAQ

How much can I claim on my holiday let?
Typical claims range from £20,000-£80,000+ depending on property size and specification. Higher-spec properties with premium fixtures, multiple bathrooms, hot tubs, and underfloor heating can achieve claims at the upper end of this range or higher.
I bought my holiday let several years ago. Can I still claim?
Yes! If you haven't previously claimed embedded assets, you can likely claim retrospectively. For properties purchased before 2012, there's no time limit. For post-2012 purchases, there's generally a 2-year window, but exceptions exist. We'll assess your specific situation during the free consultation.
What's the difference between embedded assets and furniture?
Embedded assets are fixtures permanently attached to the building - fitted kitchens, bathroom suites, heating systems, electrical infrastructure, and fire safety systems. Your accountant should claim on moveable furniture through Annual Investment Allowance (AIA). Our focus is the embedded fixtures that accountants typically miss.
Will the survey disrupt my bookings?
No. When a site survey is required, our specialist surveyors work flexibly around your booking calendar. Surveys typically take 2-3 hours and we can schedule between changeovers or during maintenance periods. We understand the importance of minimising disruption to your business.
Do hot tubs and outdoor amenities qualify?
Yes! Hot tub installations, garden lighting, decking, outdoor kitchens, and associated infrastructure all qualify as embedded assets. These are often significant value items that many accountants overlook.
What if I've renovated or upgraded my holiday let?
Recent renovations and upgrades often create new embedded assets that qualify for capital allowances. Kitchen refits, bathroom upgrades, heating system replacements, and electrical improvements all add to your claim value.
How long does the process take?
From initial consultation to receiving your tax relief typically takes 8-12 weeks. If required, the property survey takes 2-3 hours on-site, the valuation report takes 2 weeks to prepare, and HMRC processing takes 4-6 weeks after submission.
Do I need to be present for the survey?
It's helpful but not essential. You can provide key access or arrange for a keyholder to let our surveyor in. Our surveyors are experienced in working independently and will contact you if they need clarification on anything.
What if my property doesn't qualify as a Furnished Holiday Let (FHL)?
Capital allowance claims on embedded assets work for any commercial property, including holiday lets that don't meet FHL criteria. The FHL status affects other tax treatments but not capital allowance eligibility on embedded assets.
How do you value the embedded assets?
Our specialist surveyors (including RICS Chartered professionals when required) use HMRC-approved valuation methodologies, typically the 'just and reasonable apportionment' method. This involves detailed assessment of each embedded asset and its contribution to the property's overall value, ensuring full compliance with HMRC requirements.