Tax reduction for Capital loss from house sale

bharathmed

I have sold my only house for a loss after owning it for 10 years in Scotland. The house was sold in 2018. The house was unoccupied for few months prior to sale and the mortgage was had permission to let. We lived for few years and had tenants after but not occupied for few months before sale. The question is, can I claim tax exemption for my main job income for that year (i.e. include the capital loss in tax allowance). Thanks.

[Deleted User]

No - Capital gains losses can only be set against other capital gains, either in the same year or in the future. They cannot be set against income. Have you declared the disposal to HMRC?

dctrgre

Additionally the allowable loss may be less than you think it is; if the house was your principle residence at any time (I infer from your post that it was but could be incorrect) then Private Residence Relief applies.

oldbikebloke

as above, you cannot offset capital loss against income tax 
as the property was let, I assume you are already required to submit an income tax return?
Just because you made a "loss" does not mean you do not have to report it if already within self assessment, although if it was a loss then reporting is only required if the sale price was > x4 the annual exempt amount for that tax year (which even in the Scottish property market I'd guess most houses will be)

also as above, the "loss" is not the difference between purchase and sale price because for a part of the time it was your only/main home, and therefore gets full relief from CGT for that % of your ownership period. have you calculated the "loss" correctly? (I assume the property was sold on the open market, not to a "connected" person as the latter would affect the loss calculation)
Whilst income tax rules are different in Scotland, CGT rules apply across the whole UK  

one thing in your favour, as you say it is a loss, you were not required to report the sale within 30 days under the UK property account ("real time" info) process.

bharathmed

Thankyou for the useful info. It is clear to me now.

oldbikebloke

bharathmed said:

Thankyou for the useful info. It is clear to me now.

really? Given how far off your first post was, that is a remarkable transformation.
have you done any reading? This is a best basic guide: 
HS283 Private Residence Relief (2020) - GOV.UK (www.gov.uk)