FHL - swapping in and out
Whether a property qualifies as FHL is a question of fact which is decided on a year-by-year basis.
What concerns me is whether you are compelled to declare the property under FHL rules if it so qualifies in a year, or whether you get the choice to dis-apply the FHL rules, conveniently "forget" that it qualifies, and treat it ias general property income.
It seems to me that, if available, the opportunity to dis-apply FHL rules might be beneficial where the FHL property gives rise to a loss but there is other income from (non-FHL) property against which the loss could be relieved, but only if the income forms part of the non-FHL property business.
My questions are therefore (1) do you get a choice, where qualifying conditions are met, and (2) are there any disadvantages to exercising that choice in the circumstances outlined above? In future years it would revert to FHL status, for at least a full year prior to disposal. I appreciate that there may be complications in the Capital Allowances comp.
My reading of the legislation is that you don't get the choice, but that if it qualifies as FHL then FHL it is. In some respects this seems counter-intuitive, but I thought to check with you lot.
With kind regards
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