Capital Losses not allowed?!

jgh123

I am a buy to let landlord and property developer and I generally get a little Child Tax Credit each year.

Last year, amongst my investments I formed a Ltd Co to purchase a property. Planning was not granted and i sold the property at a loss of £7725. In effect I sold the shares in the company, as it only owned that property anyway. This generated a CAPITAL LOSS.

The tax credits office will not allow this loss to be deducted from my self employed income, because they do not include capital gains or losses.

Their guidance does however say that there are circumstances where Capital gains/losses would be classed as part of trading income.

It seems unfair because I consider this as much a part of my trading income/losses as anything else i've done. Furthermore I bet my back teeth that if I had made a huge profit they would have found a way to say it SHOULD be counted on the claim form!

Any thoughts anyone?

zagfles

Capital gains don't count so capital losses don't either. Tax credits are meant to be simple so they are often "not fair".

dseventy

zagfles wrote: »

Capital gains don't count so capital losses don't either. Tax credits are meant to be simple so they are often "not fair".

Right on advice.

Amazing how a BTL can form ltd companies (and take all the advantages of them!) yet not feel its "fair" when the disadvanges of the setup don't work for them.

D70

john539

jgh123 wrote: »

I am a buy to let landlord and property developer and I generally get a little Child Tax Credit each year.

Last year, amongst my investments I formed a Ltd Co to purchase a property. Planning was not granted and i sold the property at a loss of £7725. In effect I sold the shares in the company, as it only owned that property anyway. This generated a CAPITAL LOSS.

The tax credits office will not allow this loss to be deducted from my self employed income, because they do not include capital gains or losses.

Their guidance does however say that there are circumstances where Capital gains/losses would be classed as part of trading income.

It seems unfair because I consider this as much a part of my trading income/losses as anything else i've done. Furthermore I bet my back teeth that if I had made a huge profit they would have found a way to say it SHOULD be counted on the claim form!

Any thoughts anyone?

Impossible to prove what's really going on, open to high value abuse.

nannytone_2

surely if you want them to take any capital losses into account, you should also allow them to take capital gains into account too?
as a landlord/property developer, i bet your portfolio is worth more than you laid out for it?

baza52

not for long......