Claiming Rental Loss Tax Return

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    Claiming Rental Loss Tax Return

    Hi everyone,

    Anyone guidance would be greatly appreciated.

    I rented a residential property for 3 years between 2013 and 2016. During the first two tax years I made profits which I fully declared on my self assessment return and paid the appropriate additional tax. Then last year at the very start of April 2016 I decided to sell the property and my tenant left. therefore for about 4 months (it was a long painful sale) I received no income but still had rental expenses and therefore I will post a small but significant loss on my return.

    My understanding is you can offset previous rental losses against future profits but when it is the other way round how do I go about claiming some of my profit tax back. I am not normally stupid but completing the tax return last night I cannot fathom where I would request the rebate. Do I have to request it elsewhere.

    Thanks!

    #2
    Could you use it to reduce your capital gains tax?

    Comment


      #3
      You must carry forward any rental loss, accumulating any subsequent years' losses. Then, for any future rental business profit (eg ft 2019/2020…) you could offset accumulated losses against that profit, and subsequent years if necessary.

      AFAIK there is no "rebate" option. Just because a business makes a loss doesn't mean that other taxpayers have to bail it out by some rebate.
      I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

      Comment


        #4
        You can't.

        You can claim future property-related losses against future property-related gains going forward but you can't claim retrospectively against profits received in previous tax years. You also can't offset property-related losses against income from any other source (employment income/trading income/savings and investment income).

        You also can't offset it against capital gains tax, but remember to offset all your capital costs (purchase costs including stamp duty and legal fees, selling costs including estate agent commission, any capital repairs and expenditure) when you do your return.

        Also remember that accountant or bookkeeper fees are a legitimate business expense and so can be written off in full if you prefer someone else to have the stress of your tax return.

        Comment


          #5
          Originally posted by emwithme View Post
          You can claim future property-related losses against future property-related gains going forward but you can't claim retrospectively against profits received in previous tax years. You also can't offset property-related losses against income from any other source (employment income/trading income/savings and investment income).
          That is the correct answer - so no you cannot.

          Additionally from the point you took steps to sell it, it was not a rental property anyway, so there is no loss to carry forward either (to any later rental business).

          It doesn't sounds as if your expenses were relevant to Capital Gains either (apart from the direct expenses of sale like the estate agent fee).

          Comment

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