Options For Carrying A Loss Forward

SteeleyScott

Hi all,

For tax year 2021/2022. I've recorded a notable loss, long story short; for a majority of that tax year some of my portfolio was vacant and used the time to conduct some needed repairs.

All in all for that tax year, i'm about -£3,000 or so for the portfolio. Although ive never been in this position before, I know I can have that loss typically carried forward against this tax year's profits.

That's all fine and well, but my question is; are there circumstances in which HMRC could pay me back that loss instead of offsetting?

My situation is that i'm a fulltime employee primarily, and earned roughly £106k that tax year though PAYE (and paid £31k tax through PAYE or so). Ofcourse my property naturally sits atop of that....I was hoping the loss of said property portfolio could instead be used to get some of my tax back that I paid through that year in PAYE?

Or is that just not possible and must be treated separately?

thanks in advance

Ged

eskbanker

No, CGT losses can't be offset against income tax liabilities, just future CGT gains.

[Deleted User]

eskbanker said:

No, CGT losses can't be offset against income tax liabilities, just future CGT gains.

Not sure that the op has sold any property but, in any event the answer is similar. Property losses can only be carried forward against future property surpluses (profits).

Dazed_and_C0nfused

[Deleted User] said:

eskbanker said:

No, CGT losses can't be offset against income tax liabilities, just future CGT gains.

Not sure that the op has sold any property but, in any event the answer is similar. Property losses can only be carried forward against future property surpluses (profits).

Agree, think it's a portfolio of rental properties being let out 

Jeremy535897

I am assuming that there are no finance costs in OP's case. This is in the notes to SA105 concerning property income losses. Box 42 is a rare occurrence:

Box 42: Loss set off against 2021 to 2022 total income

You can only set off a loss for this tax year against your total income if the loss is from:

• agricultural expenses on your rental business

• capital allowances

Any loss set off is limited to the lowest amount of:

• boxes 32 to 35 minus box 31

• the loss in box 41 (do not include amounts used against furnished holiday lettings profits)

• your other income amounts

The amount of tax relief you can claim against your total income each year is also limited to the greater of £50,000 or 25% of your adjusted total income.

Enter the total amount you want to set off (including any loss brought forward from last year that relates to agricultural expenses or capital allowances), in box 42.

There is more information on agricultural land loss relief and the limit on income tax reliefs on GOV.UK.

Box 43: Loss to carry forward to following year, including unused losses brought forward

In box 43 enter any loss from box 41 that you have not already used in box 39 or 14. Include any loss from box 43 of your 2020 to 2021 tax return that you have not used in box 39 or 14.

[Deleted User]

Jeremy535897 said:

I am assuming that there are no finance costs in OP's case. This is in the notes to SA105 concerning property income losses. Box 42 is a rare occurrence:

Box 42: Loss set off against 2021 to 2022 total income

You can only set off a loss for this tax year against your total income if the loss is from:

• agricultural expenses on your rental business

• capital allowances

Any loss set off is limited to the lowest amount of:

• boxes 32 to 35 minus box 31

• the loss in box 41 (do not include amounts used against furnished holiday lettings profits)

• your other income amounts

The amount of tax relief you can claim against your total income each year is also limited to the greater of £50,000 or 25% of your adjusted total income.

Enter the total amount you want to set off (including any loss brought forward from last year that relates to agricultural expenses or capital allowances), in box 42.

There is more information on agricultural land loss relief and the limit on income tax reliefs on GOV.UK.

Box 43: Loss to carry forward to following year, including unused losses brought forward

In box 43 enter any loss from box 41 that you have not already used in box 39 or 14. Include any loss from box 43 of your 2020 to 2021 tax return that you have not used in box 39 or 14.

I am in NI - I believe this would be treated as conacre for which there are different rules! But we digress…

Jeremy535897

As you say, a digression. I doubt conacre arrangements would be likely to produce losses.