New announcement. Learn more

CHARTERED ACCOUNTANTS (ICAEW)

News and advice to help make your property business a success

LANDLORDS FINANCIAL BLOG

All

Landlords Tax Property Tax Landlords Tax Returns Landlords Accounts Property Tax Return Property Accounts Landlords Financial Landlords Accountant Tax Returns Tax Chartered Accountants Online Accountant Online Bookkeeping Online Tax Returns Your Online Accountant Your Online Bookkeeper VAT Businessadvice HMRC Accounting Cashflow Dividends Expenses PAYE Property Property Accountant Smallbusiness Businesstips Capital Gains Tax FHLs Furnished Holiday Lettings Ihtexemptions Income Tax Inheritance Tax NIC SDLT Taxplanning Cgt Investment Property Tax Landlord Repairs Pension Property bookkeeper Property Letting Tax Relief Taxreturn VAT invoice Allowable Business Expenses Annual Exempt Amount Bad Debt Tax Relief Business Expenses Business Rate Capital Allowances Capital Gains Capital gains tax property Cashbasis Child Benefit Compliance Deductibleexpenses Disincorporation Employment Allowance Finance Financialmanagement Gifts HMRC complaints Holiday Lets Tax ISA Lettings Making Tax Digital MakingTaxDigital Mileage Allowance Mobilephones National Insurance Overlaprelief Partnership Partnershipbusinesses Ppr Property Company Tax Property Tax Deductible Expenses Propertyallowance Reimbursedexpenses Rent a Room Relief Rental Residence Relief Small Business Tax free income TimetoPay 60 day capital gains limit Abolitionclass2 Accrualsbasis Acquisitions Advisoryfuelrates AI AirBnB Alphabet shares Amap Annual Tax on Enveloped Dwellings Appeal Artificial intelligence Assessment Asset disposal Associated Company Associated Company Tax Rules Autumnstatement Bad Debt Baddebts Badgesoftrade BADR Beancounter Benefits in Kind Breakeven Point Budget Business advice Business asset deferment Business coach Business Continuity Business Entertainment Business Rates Business Rates Relief Business tips Businessgrowth Businesstypes Buy or Lease Equipment Buytolet Capital Allowances for Cars Capital Gain Capitalallowances Capitalexpenditure Car Capital Allowances Carry Back Losses Change of Tax Basis ChatGPT CIS Scheme Class 2 NIC Common Tenant Companies Expenditure Companies House Company Account Deadlines Company Account Filing Company Strike Off Company Tax Efficient Property Companyassociation Companyloanstaxfree Compulsory Strike Off Construction Industry Scheme Contacthmrc Contentmarketing Contributions Corporation Tax Losses Corporation Tax New Regime Corporation Tax Rates CorporationTax Costs Cryptocurrency Customerlistimplications Deductible Business Expenses Deductions Demerger Depreciation Development Directors Directors Loans Directorsloans Disallowable Business Expenses Discovery Dividend allowance Dividend Allowance Reduction Dividend Planning Dividendallowance DLA Domestic Items Tax Relief Dormantcompany EIS Employee Discount Employee management Employeecompensationpayments EmployeeOwnershipTrust Endoflifeplanning Enquiry EnterpriseResourcePlanning Entertainment Entrepreneurmindset Equity Expenses Allowed For Tax Extrabenefit Eyetests Flat Rate Scheme Flipping Furnished Holiday Lets Tax Gift Aid Gift Allowance Growthhacks Help to pay tax bills HICBC HMO Licensing Fees Holdoverrelief Holiday Lettings Tax How to apply for a Business Loan How to Extract Profit Humour Hybrid Illegaldividends Income Income and Gains Inflationary Gains Influencers Inheritance Tax Nil Rate Band Interest Rates Interestrelief Interestrestriction IR35 Joint Tenant Keypersoninsurance Landlords Self Assessment Late vat registration LBTT Leadgeneration Leadmagnet Leanbusinessmodel Letting Agent Disbursements Letting Agent Recharres Lettings Relief Lifetime Limit Limitedcompany Liquidation Demerger Loaninterest Long Lets Tax Longservice LTT Mainresidencerelief Managed Lets Management accounting Maritalhomedivorce Marriage allowance Marriageallowance Mileage payment Minimumwage Mixedusesdlt Mortgage costs Mortgage Interest Relief New property Newcompanycarfuelrates Newnicrules NIC 2023 to 2024 NIC savings Nicdisregard Nicreduction NMW Nmwerrors Non Allowable Business Expenses Non-taxable Nudgeletter Optiontotaxvat Overpayment Relief Overseas properties Paperform Partnership schemes Parttime Patternofoccupancy PAYE by Direct Debit Payrolling Penaltypoints Pension Payments Tax Relief Pensioncontributions Pensions Performance-reviews Periodofgrace Periodsofabsence Personal Expenses Personal finance Personalallowance Personalguarantees Postcessationrelief Pretradingexpenses Profit Profit-and-loss ProfitAndLoss Property Allowance Property Development Company Property Incorporation Property Investment Company Property investor accounts Property investor tax tips Property Rental Business Property Trading Propertycompany R40 Recharges by Estate Agents Regularpayments Relief Rent your drive Rentaroom Research & Devolopment Residential property gains Residentialsdlt Retail stock control Retainedprofits Revenue Room for rent tax Rti SA Salary Savings SDLT changes Section 455 Tax Section455tax Selective Licences Landlords Self Assessment Self-employednic Selfemployed Selling Online Seperation Servicecharges Settlementslegislation Simplified Expenses Smallbiz Smallbusinessraterelief Software Sole Trader Spring Budget Staffparties Stamp duty Student Loan Deductions SuccessJourney Tax Allowance on Driveways Tax Allowances Tax Break Tax Codes Tax Deadlines Tax Deductions Tax Filing Deadlines Tax Free Childcare Tax Implications Tax on Company Vans Tax position Tax Refund Tax tips for landlords Taxbillpayments Taxconsequences Taxincentives Taxposition Taxpositionassets Taxrelief Taxreliefs Taxses Terminationpayments Tips Trade professional Trading losses Training Transfer Assets Transfer Assets Between Spouses Umbrellacompany Undisclosedincome Unpaid Rent VAT Bad Debt Relief VAT Deadlines VAT Disbursements VAT Penalties VAT registration VAT Reverse Charge Vatpenalties Vatregistered Vatregistrationthreshold Wellbeing Working from home

TAGS

Utilising losses from a property rental business

September 2, 2024

Where a landlord makes a loss on their property rental business, the options for using that loss are limited. The rules depend on whether the business is carried on by an unincorporated landlord or by a company.

Unincorporated landlords

Where a landlord has an unincorporated property business, the general rule is that if a loss is made in that property rental business, it is carried forward and set against the first available profits of the same property rental business. The relief is given automatically and there is no need to make a claim.

Example

Peter lets out a property on a long-term residential let. In 2023/24 he makes a loss of £1,200. In 2024/25 he makes a profit of £4,600.

The loss of £1,200 from 2023/24 is carried forward and set against the profit of his property rental business for 2024/25 of £4,600, reducing the taxable profit for that year to £3,400.

Where a landlord has more than one property in a single property business, the losses from one are set against the profits from another in arriving at the profit or loss for the business as a whole for a particular year – there is no need to consider each property separately.

Example

Jane lets out three properties. The properties comprise a single property rental business. In 2024/25 she makes a loss of £6,000 on one property, a profit of £4,300 on another property and a profit of £7,100 on the third property. Her profit for the business as a whole is £5,400. The loss on property 1 is automatically relieved against the profits on properties 2 and 3.

Where a landlord has more than one property rental business, the losses made in one business cannot be set against the profits of another property business. For example, a loss in 2023/24 on an FHL business could not be set against a profit in 2023/24 on a separate property rental business.

However, the abolition of the FHL regime from 6 April 2025 will mean that any unused losses from the former FHL business as at 5 April 2025 can be used against the profits from the amalgamated property business beyond that date.

If a property business ceases, relief for unused losses is lost, even if the landlord starts up a new rental business at a later date. Care must be taken if there is a pause in letting where there are unused losses as relief will only be available if the same business, rather than a new business, continues after the pause.

Corporate landlords

Where the property business is carried on through a company, the loss must first be set against the company’s total profits for the accounting period. Thereafter, it must be carried forward and set against future total profits of the same property business. Any unrelieved losses at the date of cessation are lost.

Rental

Landlords Financial

Landlords Accountant