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Loss on sale of Buy to let
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selfhelp999
Posts: 2 Newbie
in Cutting tax
Could someone advise on my situation.
I have two buy to let properties, one owned for around 10 years the other purchased about 3 years ago. The property purchased 3 years ago has not worked out and I have made a net rental loss on it every year, it was bought for £80,000 and now I am looking to sell it for £50,000.
I understand for this I can report this £30,000 allowable loss to HMRC, how could I use this £30,000 can this be offset against my rental profit for the other property which is around £3,000 per year? Can I use the allowable loss against my normal employment tax, in order to reduce my tax liability?
I have two buy to let properties, one owned for around 10 years the other purchased about 3 years ago. The property purchased 3 years ago has not worked out and I have made a net rental loss on it every year, it was bought for £80,000 and now I am looking to sell it for £50,000.
I understand for this I can report this £30,000 allowable loss to HMRC, how could I use this £30,000 can this be offset against my rental profit for the other property which is around £3,000 per year? Can I use the allowable loss against my normal employment tax, in order to reduce my tax liability?
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Comments
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You csn't set the capital loss against any ncome, only future capital gains.
Where did your understanding come from?0 -
No, it is a capital loss.
You can only set if off against capital gains, not income.0 -
Thanks for the replies, I misunderstood the HMRC website.
Am I right in thinking the allowable loss of £30k will stay on my account indefinitely, as I am not expecting to use any of my capital gains allowance anytime soon? The only scenario i can think this will be of use to me is if i sell my other rental property and its value increase significantly.0 -
Yep (provided you haven't sold to a connected person). Still include it on your tax return showing a loss, which is then carried forward indefinitely.0
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selfhelp999 wrote: »Thanks for the replies, I misunderstood the HMRC website.
Am I right in thinking the allowable loss of £30k will stay on my account indefinitely, as I am not expecting to use any of my capital gains allowance anytime soon? The only scenario i can think this will be of use to me is if i sell my other rental property and its value increase significantly.0
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