Unable to use property letting losses carried forward from previous year
I incurred losses on my Let property last year. The tenants paid six months’ rental up front during year 2017/2018 (declared in full on my tax return) but expenses were incurred during year 2018/2019 which have resulted in a loss for the year. However, the property in question has now become my principal place of residence and I have no other property income nor will have in the future against which to offset these losses. Nor do I intend to sell the property so the losses cannot be used against any CGT liability. Do I have to just write off these losses, which would seem grossly unfair or can I get a refund against overpaid tax last year?
Re:Unable to use property letting losses carried forward from previous year
Thank you for your question.
I would advise you that unfortunately when a rental business ceases then any losses that have arisen up to the date of the cessation of the rental business are usually lost as they cannot be set off against any other income (including any future Capital Gains).
However, if you start to rent out another property within 3 years of the cessation then you will usually be able to set off any losses against the new property.