FHL and BADR when property was previously tenanted

Does BADR apply to the entire gain or is it pro rata based on the ac dual use?

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Client has owned a property for 10 years. Operated as a Qualifying FHL for the past 4. Now wishes to sell before April 2025. Conditions for BADR are met.

Does BADR apply to the 10/10 of the gain or just 4/10 of the gain? Thanks.

Replies (4)

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By David Ex
23rd May 2024 10:44

Worth a read of the HMRC manual and legislation if you’re not sure:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg63950

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Replying to David Ex:
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By SPHAccounting
23rd May 2024 12:23

David Ex wrote:

Worth a read of the HMRC manual and legislation if you’re not sure:

https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg63950

Thanks. I've pored over them but no reference to this specific case. Nothing in their examples either.
I've seen reference in Tax Cafe guides from Carl Bailey that providing conditions for the qualifying period (2 years) and the disposal (April 2025 in the case of FHLs) are met, then it makes no difference what the preceding use was.
This seems too good to be true, but I'm finding no evidence to suggest otherwise.

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Replying to bettybobbymeggie:
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By SPHAccounting
23rd May 2024 13:16

bettybobbymeggie wrote:

This thread may be of use:

https://www.accountingweb.co.uk/any-answers/capital-gain-fhl-and-badr

Thank you. It would appear that the whole gain does indeed qualify for BADR. Quite generous and little wonder its being abolished!

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