After April 2025, all furnished holiday lettings (FHLs) will be assessable in the same proportion as ownership, and losses carried forward will be treated as the losses of the ongoing UK property business. What does this mean where a husband is currently declaring 100% of his income and the total losses have been shown as carried forward on his tax return? Next year, are 50% of the carried forward losses just reallocated to his wife? Suddenly, brought forward losses would appear on her tax return that weren't there before and his will reduce. Is this correct? 

Arthur Weller replies:  

From what I can see, the losses of the FHL business that were 'created' up to 5 April 2025 remain personal to the person who was running the FHL business until 5 April 2025. The transitional rules state that the losses are carried forward to the regular property rental business after 5 April 2025. So, since it was your husband who was declaring 100% of the FHL income until 5 April 2025, only he will utilise all the losses after 5 April 2025 against his rental property profits.