ACCA TX ^UK Syllabus B. Income Tax And Nic Liabilities - Property business loss relief - Notes ^{6 / 9}

Relief is only given against future property business profits

If total expenses exceed total income, the property income assessable is NIL and the excess property loss is carried forward and offset against future property income profits ONLY.

Property business losses cannot be carried back to previous accounting periods.

Therefore, on cessation of trade, any property business losses, which cannot be relieved in the final year, will be unrelieved.

Illustration:

• In 2023/24 a trading income of £6,000 was generated and a property loss of (£1,000) was generated.

• In 2024/25 a trading income of £1,000 was generated and property income of £800 was generated.

• What property income will be assessable to income tax in the years 23/24 and 24/25?

Solution:

2023/24 – Nil (as if property loss is incurred, the income assessed is Nil and can only be used against future property profits)

Note that for a furnished holiday letting loss, this can only be carried forward against future furnished holiday letting profits, it cannot be relieved against other property income.

For example if there was a FHLA loss of £1,000 in 23/24 and property income of £1,000 (from a different property) in 24/25 - the FHLA loss would not be relieved against the other property income in 24/25.