Hi I wonder if anyone can give me their opinion on the following queries.
1. An individual has an existing property which qualifies as an FHL. A further property is acquired with the intention of becoming an FHL but before it is let expenditure is incurred on items, in respect of this second property, which are eligible for capital allowances.
At what point can the expenditure incurred on the second property be claimed? Would it be treated as being part of the exisiting FHL business and therefore claimed at the point it is incurred or would it have to be claimed when the second property commences to be let - as if it is pre-trading expenditure?
2. Two properties are trading as FHLs. One of the properties ceases to be rented for an 18 month period whilst renovations are carried out. Items of expenditure which qualify for capital allowances are incurred during that period. Once the renovations are complete the property recommences letting as an FHL and qualifies as such in the first year of reletting, how should the expenditure be treated?
I would be very grateful for any responses.