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Hi, when calculating property income, we seperate FHLs from other properties as the relief treatments for FHLs are different from thoes for ordinary properties. However after all the relief treatments, where does FHL income eventually go? Say, I have trading income of £20000 (stationery business), income of £18,000 from other properties and FHL loss of £5000. Should it be treated as a second trade? Thanks.
The FHL loss can be treated as a trading loss so can be offset against total income of the current and/or previous tax year or carryforward against same type of income. If the FHL was a profit it would be taxed as non savings income.
Hope this helpsSo although it is classified as property income, it will never join the property income from other properties.
Secondly although their losses are treated like trading losses, it will never join trading profit from other businesses either.
It will always have its own row in income tax computation in the form of either FHLs income or current year relief-FHLs or carryback relif-FHLs to offset total income or carryforward relief-FHLs to offset future FHLs income.
Is that right? Thanks so much.
It really doesnt matter if it is a profit that you add it to other property income-technically it is earned income rather than Investment income. If losses then yes a separate trade
I think you are going beyond the realm of F6
Hope this helps
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