What CGT rate applies to a Cornwall holiday let sale in 2026?

24% for higher-rate / additional-rate taxpayers; 18% for basic-rate taxpayers — standard residential CGT rates. Business Asset Disposal Relief (BADR) at 10-14% is no longer available for holiday let sales post-6 April 2025. Annual CGT allowance is just £3,000 in 2025-26 and 2026-27 (down from £12,300 in 2022-23). Joint ownership uses two annual allowances (£6,000 total).

How much more CGT will I pay on a Cornwall holiday let sale post-FHL abolition?

For a £200k capital gain at higher-rate: £47,280 vs £19,700 under old BADR — £27,580 more. For a £450k gain: £107,280 vs £44,700 — £62,580 more. The differential scales linearly with gain. Higher-rate taxpayers (24% vs 10-14% BADR) bear the largest impact. Basic-rate taxpayers selling moderately-appreciated properties see smaller differentials.

Can I still use BADR on a Cornwall holiday let sale?

No — BADR is no longer available for holiday let disposals from 6 April 2025. Transitional rules apply only narrowly for contracts exchanged before that date. Even where BADR did apply (e.g., other business-asset disposals), the rate has moved from 10% (2024-25) to 14% (2025-26) to 18% (2026-27), with the lifetime limit reduced to £60,000 from April 2026. The relief is being systematically diluted across all asset types.

Should I sell my Cornwall holiday let now to lock in current values?

Don't make panic sales based on tax alone. Model the full picture: current valuation, projected rental income net of post-FHL economics, CGT cost on sale, opportunity cost of capital, personal circumstances. Sales make sense for: portfolio rationalisation, retirement, estate planning, persistent under-performance. Sales don't make sense purely as a tax response — Cornwall holiday let market is functional and well-managed properties remain profitable.

Does CGT get wiped if I die owning the holiday let?

Yes — CGT is reset to market value at date of death. No CGT is paid on the historical capital gain. However, the property's full market value forms part of your estate for Inheritance Tax purposes (40% above the nil-rate band). Holiday lets are not Business Property Relief assets (they're investment property). For owners with limited IHT exposure, 'hold until death' can be tax-efficient. For estates already above IHT thresholds, this strategy doesn't help.

When do I need to report and pay CGT on a Cornwall holiday let sale?

Within 60 days of completion via HMRC's Real Time Capital Gains Tax service. Both the report and the payment are due within the same 60-day window. Late filing penalties start at £100 and escalate. For inter-spouse transfers before sale, no immediate CGT is triggered (spouse-to-spouse transfers are CGT-neutral) — but the receiving spouse inherits the original tax base, not a stepped-up one. Use a specialist tax adviser for any non-trivial transaction.

Capital Gains Tax on Holiday Lets After FHL Abolition (Cornwall Owners)

Of all the changes triggered by the abolition of the Furnished Holiday Lettings tax regime on 6 April 2025, the one with the largest single-event financial impact is on Capital Gains Tax at sale. Previously, qualifying FHL properties sold under Business Asset Disposal Relief paid 10% CGT (rising to 14% during 2025-26, 18% from April 2026). Standard residential CGT — which now applies — is 24% for higher-rate taxpayers, 18% for basic-rate. For a Cornwall holiday let with significant capital gain, this can be a £20,000-£50,000+ swing on a single transaction. Here's the 2026 picture.

The pre-April 2025 position (for reference)

Until 6 April 2025, properties qualifying as Furnished Holiday Lettings were treated as business assets for CGT purposes — making them eligible for:

Business Asset Disposal Relief (BADR): 10% CGT rate on gains up to a £1m lifetime limit (later reduced)
Rollover relief: deferring CGT by reinvesting proceeds into other qualifying business assets
Gift Holdover relief: gifting the property to family without immediate CGT charge

For Cornwall holiday let owners with substantial capital appreciation — common given Cornwall's strong property price growth 2014-2023 — these reliefs meant CGT on eventual sale was capped at single digits effective rate.

What changed on 6 April 2025

From that date, holiday lets are treated as standard residential property for CGT purposes. The headline changes:

BADR no longer available for holiday let sales (new disposals from 6 April 2025)
Rollover relief no longer available for holiday let proceeds
Standard residential CGT applies: 24% for higher-rate / additional-rate, 18% for basic-rate
Annual CGT allowance: just £3,000 in 2025-26 (down from £6,000 in 2023-24 and £12,300 in 2022-23)
Reporting deadline: 60 days from completion for residential property gains (under the Real Time Capital Gains Tax service)

The 2026 BADR rate movements

BADR itself changed during 2025-26:

2024-25: 10% rate, £1m lifetime limit (BADR's traditional position)
2025-26: 14% rate, £1m lifetime limit
2026-27: 18% rate, lifetime limit reduced to £60,000 per person (down from £1m)

For holiday let owners specifically, this is academic — BADR doesn't apply to holiday let disposals from April 2025 anyway. But it's important context: even if the FHL regime hadn't been abolished, BADR was being significantly diluted for holiday let owners on the same timeline.

Worked example: £200k gain Cornwall holiday let

Take a Cornwall holiday let bought for £350,000 in 2015, sold for £550,000 in 2026 (£200,000 capital gain after acquisition costs):

Pre-April 2025 (under FHL + BADR at 10%)

Capital gain: £200,000
Less annual allowance (2024-25): -£3,000
Taxable: £197,000
CGT at 10% (BADR): £19,700

Post-April 2025 (standard residential, higher-rate taxpayer)

Capital gain: £200,000
Less annual allowance (2025-26): -£3,000
Taxable: £197,000
CGT at 24% (residential higher rate): £47,280

Difference: £27,580 more CGT on the same sale, simply because of the timing.

Larger gain: £400k

A Cornwall premium property bought 2010 for £400k, sold 2026 for £850k (£450k gain):

Pre-April 2025 (BADR 10%): CGT roughly £44,700
Post-April 2025 (residential 24%): CGT roughly £107,280
Difference: £62,580 more CGT

What about properties exchanged but not completed before April 2025?

Transitional rules apply for sales that exchanged before April 2025 and completed after. The general principle: BADR remains available where the contract was entered into before 6 April 2025 (subject to conditions). This is a narrow window — most Cornwall holiday let owners considering sale need to plan around the post-April 2025 rules.

Reliefs that still apply

A few CGT reliefs survive the FHL abolition:

Private Residence Relief (if applicable)

If the property has been your main residence at any point during ownership, you can claim PRR for the relevant period. Lettings relief (an additional relief for properties that were both your main residence and let) has been significantly narrowed since April 2020 and is rarely useful for Cornwall holiday lets that have always been holiday lets.

Gift Holdover relief on business gifts

If transferring the property to a trust or to a family member as a business gift, holdover relief may still apply in narrow circumstances. Almost always needs specialist tax advice.

Spouse / civil partner transfers

Inter-spouse transfers remain CGT-neutral. Useful for tax planning — transferring an unequal share before sale can spread the gain across two annual allowances (£3,000 each) and potentially across different tax bands.

Annual CGT allowance

£3,000 per person per tax year (2025-26 and 2026-27). For jointly-owned properties, that's £6,000 of gain excluded.

Spreading sales across tax years

One legitimate tax planning move: if you're selling multiple Cornwall holiday lets in your portfolio, spreading the sales across tax years uses multiple annual allowances. £3,000/year × 4 years = £12,000 of gain excluded. Modest but real.

Should you accelerate or delay a sale?

Cornwall holiday let owners considering sale face a complex decision:

Reasons to accelerate

Cornwall holiday let valuations have been broadly flat to slightly down 2024-2026; further price weakness possible
Operating costs rising (council tax premium, FHL income tax impact, EPC C costs coming)
Capital tied up in a property could be redeployed to more efficient investments
Personal circumstances (retirement, simplification, estate planning)

Reasons to delay

If property prices recover, the gain is locked in at sale
Continued rental income while waiting
CGT rates could fall in future budgets (politically unlikely but possible)
Death of owner: CGT is wiped on death — only Inheritance Tax applies (currently 40% above nil-rate band)

The death / Inheritance Tax interaction

An important consideration for older Cornwall holiday let owners: CGT is wiped on death. The property's tax base is reset to market value at date of death, and the inheriting party pays no CGT on the historical gain. However:

Inheritance Tax applies at 40% on the estate's value above the nil-rate band (£325k + potential residence nil-rate band £175k = £500k for many estates; £1m for married couples)
Holiday lets are not business property for Business Property Relief purposes (they're investment property)
For estates likely to be IHT-bearing, holiday lets compound the IHT exposure

For owners in their 70s+ with significant unrealised CGT gains on Cornwall holiday lets and limited likely IHT exposure, the "hold until death" strategy can be tax-efficient. For owners with substantial estates already above IHT thresholds, this strategy doesn't help.

Reporting and payment deadlines

Cornwall holiday let sales must be reported to HMRC within 60 days of completion via the Real Time Capital Gains Tax service. CGT payable within the same 60-day window. Late reporting incurs penalties starting at £100 and rising.

Don't make panic decisions

The FHL abolition impact is real and the CGT increase is significant. But making panic sales in 2026 to "lock in current values" usually doesn't make sense. The Cornwall holiday let market is functional, well-managed properties remain profitable, and the political direction of CGT could shift in future budgets. Make sale decisions based on personal circumstances and long-term financial planning, not short-term tax panic.

Action items for Cornwall holiday let owners

Model your current CGT position with a holiday-let-specialist accountant. Know what you'd pay if you sold tomorrow.
Document your acquisition costs thoroughly — purchase price, stamp duty, legal fees, capital improvements over the years. These reduce the gain.
Consider inter-spouse transfers before sale if joint ownership isn't already optimal
Plan multi-property sales across tax years if applicable
Don't make panic decisions based on tax alone — model the full picture
Use a Cornwall-specialist tax adviser — generic accountants often miss holiday-let-specific reliefs and considerations

Bottom line

CGT on Cornwall holiday lets post-FHL abolition is significantly higher than pre-2025 — typically £20,000-£60,000+ more on properties with substantial gains. This affects sale timing decisions but shouldn't dictate them. Model your specific position with a specialist accountant, use the surviving reliefs where applicable, and make decisions on long-term financial criteria rather than short-term tax response.

For Cornwall owners weighing whether continued holiday-let operation makes more sense than sale, the operational economics of professional management vs DIY often matter more than the one-off CGT calculation. Submit your property details and we'll pair you with a Cornwall agency that can advise on continuing operation — and signpost specialist tax advisers as needed.