Grouping Profit/Losses on 2 BTL's?
Discussion
If you have more than one BTL do you need to keep the finances for each BTL seperate, or can you just lump all the profits, and all the expenses to come up with a net profit/loss as a whole?
The reason I ask this is I have a low yield flat that needs a lot of repairs due to an idiot ex-tenant. If the costs exceed the profit for the year, can the additional costs be off set against profit on my other property?
The reason I ask this is I have a low yield flat that needs a lot of repairs due to an idiot ex-tenant. If the costs exceed the profit for the year, can the additional costs be off set against profit on my other property?
If you have more than one rental property you definitely SHOULD keep their finances and records separate so you can properly determine the profit or loss each property is making.
However, if in any given tax year. one property makes a profit and the other makes a loss, you ARE allowed offset the loss against the profit. If there is a remaining combined profit, you will pay tax on that profit.
If there is a combined loss, you can carry that loss forward for odffset against future rental profits.
The one thing you CANNOT do with rental losses is offset those losses against other income (such as salary or self-employment income) in the same or future tax years.
The rules are different if the property income is derived from a UK holiday letting.
However, if in any given tax year. one property makes a profit and the other makes a loss, you ARE allowed offset the loss against the profit. If there is a remaining combined profit, you will pay tax on that profit.
If there is a combined loss, you can carry that loss forward for odffset against future rental profits.
The one thing you CANNOT do with rental losses is offset those losses against other income (such as salary or self-employment income) in the same or future tax years.
The rules are different if the property income is derived from a UK holiday letting.
Eric Mc said:
If you have more than one rental property you definitely SHOULD keep their finances and records separate so you can properly determine the profit or loss each property is making.
However, if in any given tax year. one property makes a profit and the other makes a loss, you ARE allowed offset the loss against the profit. If there is a remaining combined profit, you will pay tax on that profit.
If there is a combined loss, you can carry that loss forward for odffset against future rental profits.
The one thing you CANNOT do with rental losses is offset those losses against other income (such as salary or self-employment income) in the same or future tax years.
The rules are different if the property income is derived from a UK holiday letting.
Thanks. I do keep my records seperate, its just the first time one will have made a loss.However, if in any given tax year. one property makes a profit and the other makes a loss, you ARE allowed offset the loss against the profit. If there is a remaining combined profit, you will pay tax on that profit.
If there is a combined loss, you can carry that loss forward for odffset against future rental profits.
The one thing you CANNOT do with rental losses is offset those losses against other income (such as salary or self-employment income) in the same or future tax years.
The rules are different if the property income is derived from a UK holiday letting.
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