Hi. does anybody know what happens to the loss made on a FHL if the owner decides not to continue renting the property in 12/13 as they now cannot offset it against their taxed income?
There is a box to tick on the SA software to say ceased income 2012-13, the notes say HMRC are responsible for adjusting your tax code. Does this mean they will offset the loss against taxable income but through the tax code as opposed to a lump sum payment as in pevious years.
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As with a trade losses are lost
Hi - unless it's a temporary cessation (up to 3 years I think) from the same property, once you cease the FHL the losses die as they would do with the cessation of a trade and, obviously, if an ordinary property letting business ceases.
With regard to your first paragraph about offsetting of losses against other income, just in case, this ceased in 2010-11 so any losses in 2011-12 remain within the FHL business. The CGT benefits of an FHL are still in place so many are still continuing with the business, despite the restriction of loss relief.
As above
I suspect that the source has ceased is to pick up losses that are lost as the business has ceased.