What are the options for tax relief for a property income loss? - USERNAME: Rodderstax - 22/07/2022

USERNAME: Rodderstax
Tax Question: Re Tax on rented property.

If in the tax year to 5th April 2022 a landlord declares a rental income for tax of circa £20,000 and tax is paid.

In the tax year to 5th April 2023 the same landlord has deductible repairs totaling circa £40000 -causing a rental loss for tax of £20000.

Do the tax provisions allow that loss to be offset against the previous years income to cause a tax refund. OR are there other ways of using the loss...e.g. Carrying loss forward or against other income?

Essentially what are the choices?

Answer:

There is no provision in the UK tax legislation for property losses to be carried back. The default position is that they are carried forward for offset against profits from the same rental business. In certain limited cases where losses arise from excess capital allowances they can be used against other income of the same year, but that doesn't appear to be the case here.