Investment vs future tax

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    Investment vs future tax

    Hello, This is my first year doing a tax return and I have employed a tax accountant. I invested roughly 19000 pounds on renewal and repairs to a block with three flats. The income of the block was less, roughly 17000 . My accountant listed a loss of roughly 2000 to be carried forward to the following year. I had thought that if I had invested so much that the whole amount 19000 would be counted as a loss and carried forward or set off against tax over the following years? Can anybody help , is the accountant correct?

    #2
    Yes , your accountant is correct. If you have no expenses , you would pay tax on £17,000 profit.

    The rental profit = 12 months Rent - Allowed Losses = £17000 - £19000 = £ 2000 loss to carry to next year's tax return .

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      #3
      definitely cheaper not to pay an accountant at all and ask advice here and then do it yourself.

      but if I was going to pay an accountant...

      Comment


        #4
        Improvements may be capital expenditure, unless incidental to repair. These are not entered on the tax return until the property is sold. The actual £19,000 may include both capital and income items, and be taxed under both regimes.

        Flat renovation allowance was abolished some years ago.

        Comment


          #5
          Originally posted by leaseholder64 View Post
          be taxed under both regimes.
          Do you mean that some parts will be taxed under one and some under the other and not that some aspects will be taxed twice?

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            #6
            It's a basic policy of tax law that you should not be taxed twice, so I meant that parts would be taxed one way and parts the other way.

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              #7
              Apart from when you're taxed on your income, then you use that income to buy goods and services (upon which you pay tax), you invest that income (where you can be taxed on the proceeds or capital growth) and finally when you leave it in your estate, it can be taxed again before being paid out as an inheritance...

              ​​​​😀

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