Offsetting rental losses on EU FHLs

[LindseyS]

Good afternoon all,

I seem to have missed the final decision on the 2010-11 tax year for offsetting EU holiday let losses against UK BTL gains - can we or can't we?

I thought that it was announced that this facility would now stay in place for all UK and EU FHLs, and would not be scrapped as had been proposed, but various internet sites seem not to agree!

Last question - I have a loss on my leaseback registered on my French tax return, if I can still offset this, where does it go on the self assessment online form? I have completed the "UK holiday let" section for my UK holiday let and the UK property section for my BTLs, but cannot see anything about EU property.

Thanks,

Lindsey

[Peter D]

The last time I checked the UK and EU property gains and losses are treated as two seperate business and you can not offset an EU loss against a UK gain. Regards Peter

[Peter D]

Here perhaps.
http://www.hmrc.gov.uk/budget-updates/autumn-tax/tiin1755.pdf
Regards Peter

[LindseyS]

Thank you Peter, that was very helpful.

I understand from this that for tax year 2010-11, the specific reference to the EEA properties is not made in the tax return because the decision to include it was non-statutory - and therefore that I should enter the French figures in the section for UK holiday lets for this tax year, and offset it against my BTL profits.

For 2011-12 when the legislation changes to state that it can only be offset against other furnished holiday let costs, I assume the title of that section will change to state UK and EEU FHLs.

I had maybe better read this over a couple more times before I complete my 2010-11 return!

[maths]

Fo the tax year 2010-2011 is it not the case that FHL treatment extended to EEA properties?

Assuming this to be so, then presumably any losses are "trade" losses and can be offset against other income?

Effective 6.4.11, however, trade loss treatment ceases and losses can only be carried forward; for this purpose a UK property business is distinct from an EEA property business (as are EEA FH<s and UK FHLs).

[LindseyS]

I understood the 2011-12 section a little differently in that I read it as FHL lets can be treated as the same business whether they are EEA or UK. Certainly though it cannot be treated like a trading loss from April 2011.

I agree 2010-11 that they are both treated as a trading income and can be offset against other gains. I still can't find anywhere specific to put this into the self assessment online form and can only think that it has to go into the "UK Furnished Holiday Lets" section.

[maths]

If you are looking at the 2010/11 tax return all the information re FHL and normal property income is detailed on the Supplementary Pages "UK Property"; this includes FHLs in the EEA.

Non-FHLs outside the UK are detailed on the "Foreign" pages.

[LindseyS]

Thanks Maths, I wasn't sure on that part part as it did not specifically state it.

[LindseyS]

This of course brings up another question - I assume I complete the numbers as if this were a UK holiday let and can claim only 10% W&T allowance on my leaseback rather than the lovely French amortisation?