can I write off a loss on one rental property against another rental property

molit

As the title says really,

rental property 1 makes a profit, rental property 2 makes a lass, when I offset the tax vs interest payments, do I have to do it per house or overall.


e.g. property 1 income 1000, mortgage 500.
Property 2 Income 1000, mortgage 1500

do I pay tax on £500, or no tax

(Figures are illustrative, if they werent, I'd be out of this game)

MoneySavingUser

If more than one property is let all income and expenditure is pooled to calculate a single amount of taxable property income - therefore you have 0 so no tax payable

molit

thanks ever so much for that...used to dealing with one house and the tax issues assoicated with that, but moving again so that presents a whole new raft of questions...

mlz1413

Keep your records per house:

Description house 1 house 2 Total
Rental Income 1000 1000 2000
M. Interest paid -500 -1500 -2000
Total due at 500 -500 = nil


Sorry it doesn't line up, my spaces disappear and tab doesn't work!

chrismac1

This is true so long as all the properties are either in the UK or overseas. UK lettings and overseas lettings are treated in tax law as two separate businesses - don't ask me why because it makes no sense to me either! So a loss on a UK property can't be offset against an overseas profit, or vice versa.

molit

Cheers guys/gals. Both properties are UK - basically I have had to move a coule of times with work recently, and the mortgage covers the rent, and I want to get settled, rather than hvae the hassle of selling