COVID and new FHL business
Postby Brightonian » Fri Nov 19, 2021 4:39 pm
I am aware that new FHL businesses which haven't been able to trade because of COVID cannot claim FHL treatment or make a period of grace election because they haven't met the FHL requirements in the past. My clients, a married couple, bought an FHL as a going concern. The plan was that most of the income would be allocated to H, who has little income and would manage the property - W has a full-time job. Unfortunately their business began just as COVID got going. The property was not let at all during 2020/21 but the local authority paid a number of grants to H alone (although the property is owned 50/50) My problem is that, because the lettings will not be FHL, the profit has to be split 50/50, which is not to W's advantage. It's a longshot I know but is there any possibility of allocating the profit wholly to H on the grounds that the grants were paid solely to him?