A: HMRC have stated ‘The repeal of FHL provisions does not mean that FHL businesses have ceased, it merely disapplies the relevant legislation. The affected businesses will be continuing property businesses, until there is an actual cessation of business activity’.
Following the abolition of the FHL rules BADR is no longer available for the disposals of FHL properties unless the FHL business actually ceased before 6 April 2025.
From 6 April 2025 capital allowances are no longer available on fixtures, furniture or furnishings. Replacement of Domestic Items Relief will then be available on replacement items. For qualifying capital expenditure that has been included in a capital allowance pool before 6 April 2025, Writing Down Allowances, balancing allowances and charges can continue to be claimed after April 2025 on that pooled expenditure until it is used up or a small pool claim is made.
Any losses incurred by the FHL carried forward from previous years will be treated as losses of the ongoing UK or Overseas property business going forward. This means the losses can be set off against other property income.
These publications from Markel Tax were correct at the time of going to press and should be considered as principles-based guidance only. To check current validity, call the Markel Tax helpline. ICAEW (as distributor) disclaims all liability for any errors or omissions.
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