Can I use previous years losses to reduce profits

  • Filter
  • Time
  • Show
Clear All
new posts

  • Trex_99
    started a topic Can I use previous years losses to reduce profits

    Can I use previous years losses to reduce profits

    Over the years I've made a £50k loss from renting property. This year Ive made £3k profit. My question is, is it ok to deduct some of the previous years losses to offset against this years profits? So that on my tax return I can enter £0 profit made?
    I normally just carry all my losses forward but if I dont use them whats the point?

  • JamesHopeful
    I have racked up similarly-sized carried over losses myself. In my case, it's been because I've undertaken a couple of top-to-bottom refurbishments each year for several years on the trot (and before anyone says it, yes I did consider very carefully which elements of the refurbishment expenditure were revenue in nature and which elements were capital).

    Leave a comment:

  • boletus
    Originally posted by AndrewDod View Post
    The only time I have ever had a 50K loss is when a massive service charge of around that amount was levied for major repairs to a leasehold flat. Otherwise it is pretty difficult. So please explain how you did that.
    I doubt the OP will respond after so long Andrew.
    But I've worked with blokes overseas who racked up similar losses so I'll have a stab at explaining;

    Large, expensive, family home out in the sticks, totally unsuitable for renting out, awful yield. They just want a nice place to come back to with someone helping out with the costs in the meantime.

    Annual mortgage interest £20K
    Rent £18K
    Less letting agent fees, insurance, repairs, voids etc £12K income, £8K loss.
    6 years working overseas = £50K (aprox) cumulative loss.

    Unless they've had very unlucky timing, they've probably made well over that £50K in capital appreciation. A hedge on UK property prices if you like.

    Leave a comment:

  • AndrewDod
    The only time I have ever had a 50K loss is when a massive service charge of around that amount was levied for major repairs to a leasehold flat. Otherwise it is pretty difficult. So please explain how you did that. I am suspicious and HMRC would be likewise.

    Have you put in a tax return every single year explaining those losses? And calculating them correctly? Like not including full mortgage payments unrelated to interest. Or including capital costs.

    Leave a comment:

  • Gordon999
    If you have losses from past years to carry forward, then you should submit a paper tax return every year before end of Oct .

    On your tax return for 2017-2018 , you may have gross rent = £10,000 and maintenance expenses = £7000, so your rental profit = £3000.

    Your losses from past years = £50,000 are brought forward and added to the current year profit £3000 = £47,000 loss to carry forward to next year. . .

    Leave a comment:

  • AshC
    Trex_99 - yes you can - see similar question in HMRC's forum

    Leave a comment:

  • DPT57
    You can't just make it up. There are procedures for carrying forward tax losses from one year to another and it will depend on what your tax return says for the previous year.

    If you were making £50k loss then why are you bothering to continue? If I were HMRC I would want to look at little closer at your accounts but they don't have the staff so actually, you can probably just keep making it up

    Leave a comment:

Latest Activity


  • Deed of trust to Ltd company
    Hello All,

    I’m new to this site/forum so apologies in advance if this question has been asked before.
    i own my current property 100% and it’s on a personal mortgage. Now I want to move from the property due to personal reasons and want to let it out. I want to do BTL via company...
    20-05-2019, 17:11 PM
  • Reply to Deed of trust to Ltd company
    You need to post the terms and conditions of your mortgage for anyone to be able to answer but it is likely you will be breaching the terms and conditions if you don't inform them....
    20-05-2019, 18:21 PM
  • Will I pay stamp duty?
    So i was hoping for some good advice.

    Me and my girlfriend are looking to buy a house together, the problem is i already have a house of my own which i am renting out on a BTL mortgage. So if i buy a house with my girlfriend that will be my second home, but her only home.

    18-05-2019, 16:02 PM
  • Reply to Will I pay stamp duty?
    There are a minority of lenders who will accept one person being on the Title but with two persons on the mortgage in order support the affordability , otherwise You cannot circumvent the SDLT premium in the second property is in joint names.
    18-05-2019, 21:34 PM
  • Tax implications of extending a lease at no cost
    Hi there

    i am one of four directors of a company that owns the freehold of the four flats in our house.

    one of the owners is selling and wants to extend the lease as its dropped to 67 years. I realise now we should have done 999 leases as soon as we bought the freehold but...
    14-05-2019, 10:12 AM
  • Reply to Tax implications of extending a lease at no cost
    Thanks - it would be our preference to renew them all at the same but unfortunately the seller is pushing us as their buyer is threatening to pull out.

    We now have differing advice over whether we will be liable to pay tax on the assumed financial benefit of the extended lease at no cost....
    17-05-2019, 16:27 PM
  • Capital gains tax and tax credits
    hi i have recently sold a rental property and have been working out my tax liability for the GCT which works out at 2,500 tax to pay and im a non tax payer and this just takes me over the threshold - ok for tax credits pruposed do i need to declare the captial gain as its a capital gain and not income...
    17-05-2019, 14:29 PM
  • Reply to Capital gains tax and tax credits
    update - ive been onto the tax credits for the past hour and they are saying not to inclue unless im re-investing or making money from the capital gains
    17-05-2019, 16:16 PM
  • Is this legal?
    Hi all, I am completely new to this so wanted to get some informal advice. I currently jointly own a freehold property in London (with my sister that lives in the US) that I inherited from my mother many years ago. I do not live in the house, not does my sister; until now, the entire property was let...
    15-05-2019, 22:04 PM
  • Reply to Is this legal?
    It's permitted, but is obviously designed to evade tax. You need to declare the income you receive from your son - and pay tax on it. What is he going to pay over to you - the full rent or more than he has actually received? For £1500 this is a lot of complications and your son becomes a landlord with...
    17-05-2019, 09:56 AM