What happens to FHL losses from 2010/11?

What happens to FHL losses from 2010/11?

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Client has profits from Furnished Lettings (FL) and loss from Furnished Holiday Lettings (FHL) in 2010/11. FHL loss goes against FL profit as client has no other income and there is then a balance of losses to carry forward included in box 41 to the 2011 UK property pages.

Now, the “old” rules for 2010/11 seem to pool the figures together as a “rental business” and “any surplus of unrelieved loss is carried forward and set off against rental business profits of subsequent years so long as the rental business continues” as mentioned in PIM4130. Does that mean that the surplus “FHL” losses brought forward from 2010/11 can go against the 2011/12 profit from FL although we are into the “new” rules?

Your comments would be greatly appreciated as I cannot find any guidance on this in the legislation or HMRC's notes.

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