Quick question about offsetting

p3gg

Hi all, just a quickie

Can furnished holiday let losses from this year be carried forward and offset against TOTAL income NEXT year?

(Or are the options (i) to offset against TOTAL income THIS year, or (ii) to offset against RENTAL INCOME ONLY next year?)

It doesn't seem 100% explicit to me in the tax return guide.

tikitiki

Furnished holiday letting losses can only be set against total income in the year they were made. For subsequent years, it can only be offset against rental income as you have quoted in your second option.

See the losses section of the Land & Property notes: http://www.hmrc.gov.uk/worksheets/sa105notes.pdf

reddevilled

You could also carry back the furnished holiday let loss against the prior years taxable income if that is more beneficial. Beware though that if you carry back the loss you have to carry back the whole loss and may lose the use of your personal allowance (depending on your other income / size of loss).