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Sam
Sam, Accountant
Category: Tax
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Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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I own a holiday let that has qualified as a FHL for 7 years.

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Hello, I own a holiday let that has qualified as a FHL for 7 years. We are thinking of selling it now whilst sales are buoyant and reinvesting in another holiday let in 18 months. My question is, as the property qualifies for Entrepreneurs’ Relief of 10% CGT can we also use Rollover Relief and if so in the scenario that we weren’t able to find/buy another FHL within the 3 years after sale would we be liable for the 10% ET that is applicable now or would we be liable for the usual CGT if the ET is removed from FHL over the next 3 years? Many thanks.
JA: Have you talked to a tax professional about this?
Customer: Not yet.
JA: Anything else you want the Accountant to know before I connect you?
Customer: No.

Hi, Sam here , one of the UK tax Experts here on Just Answer, thank you for your question and I shall reply shortly

Hi

You can have both but if more than 3 years have lapsed then the entitlement to ER ceases due to time constraints you either claim the roll over relief and risk then a 28% or 18% charge OR or claim entrepreneurs relief at the time of sale

Thanks

Sam

Customer: replied 4 days ago.
Thank you. If we claim ER and contact HMRC within the 3 years if we can’t find a property to reinvest in would it be the 10% ER we pay as long as it’s within the 3 year limit of the rollover relief?

Hi

No as to qualify for ER you have to meet these conditions

In order to qualify, the individual must have owned the business or shares in the personal company for at least 12 months prior to the sale/cessation.

You will fail on this factor if you sell three years later

thanks

Sam

Customer: replied 2 day ago.
Hi Sam, apologies for my delayed response. Your advice has been great. We will claim entrepreneurs relief immediately upon the sale and pay immediately too. I have a couple of questions so will list below.1. We only have 1 furnished holiday let that I run myself. I do the cleaning, arrange repairs & maintenance etc and declare all income minus allowable FHL expenses on my tax return. As you can claim any ratio of profit on FHLs as a married couple I claim all the profit as it’s my only source of income. We do own another very small 1 bed property (Not in the same region) that is mainly used as a second home by us but we also let it out to cover its bills. It doesn’t qualify as a FHL as we don’t make it available for enough days and it doesn’t rent out the minimum days either. However, we still declare the income to HMRC minus allowable expenses as income from property on a separate page of the tax return than the FHL page and we do this 50/50 on separate tax returns. As only the property I run qualifies as a FHL from what I’ve read it still gains Entrepreneurs Relief. Is this correct? I’ve read if you have a portfolio of FHLs you can’t claim but we don’t. We have 1 FHL property and 1 non-FHL property that aren’t related to each other from a business perspective and are separate entities.2. As I have declared and claimed 100% of the profit from the 1 FHL when I deduct the annual CGT allowance are we able to use both mine and my husband’s CGT annual allowance as we jointly own it or just mine? If we can use both how do we do that? One CGT form or separate ones?Many tanks in advance, your knowledge in such matters is much appreciated.

Hi

As these are new sets of questions they should be listed as such as per Just Answer policy as additional information - I can send an additional time request but it might be more cost effective for you to list these and of course you can alwsys ask for Sam if you would prfer

Thanks

Sam

Sam and other Tax Specialists are ready to help you
Customer: replied 1 day ago.
Thank you. I will list as a new question.