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Furnished Holiday Lettings

Furnished Holiday Lettings

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Could someone please confirm that FHL presently assessed under schedule D case I will continue to benefit from entrepreneurs relief on a disposal after 6 April 2010.

Tom Egerton

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By Paul Soper
17th Nov 2009 09:05


As a result of a European Union case, in the last budget HMRC were forced to concede that the FHL rules, which applied only to FHLs in the UK, were discriminatory and so the reliefs, not just entrepreneur's relief, had to be extended to all FHLs in the European Economic Area but...

This made the relief too expensive and we were told that Finance Act 2010 would contain the legislation to bring the FHL system to an end, together with the associated reliefs.

To be pedantic DI hasn't applied (except for corporation tax) since April 2005 and the Income Tax Trading and Other Income Act but the principles of taxing trading income will not be applied from April 2010, profit will be measured using the rules for property income.

That does also mean that from April 2010 the property will no longer be eleigible for gift relief unde s1§65, nor roll-over relief as a business asset, nor entrepreneur's relief.



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By thomas34
18th Nov 2009 12:02

FHL Trades

Thanks for the response.

The two clients I'm thinking of have for more than 10 years have been assessed as trades on the basis that they provide additional services to that which would normally apply in a holiday let situation. Profits have never been declared on the land and property pages up to 5 April but on the self-employed pages up to 30 September and 31 December respectively (with overlap relief on one case).

I understood that although profits (or more particularly losses) on FHLs reported under Schedule A have received special treatment hitherto, they were nevertheless not defined as trades.

Will it be the case therefore that these particular trades will lose out on entrepreneurs relief?




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