Property Development losses
I have a partnership that developed a plot into five units, intending to sell on, making a nice profit.
We all know the story, the market dropped and they were unable to sell, instead holding on to them and letting them out, until the market recovers.
In 2007/08, and 2008/09 they made a trading loss which couldn't be relieved anywhere. in 2010/11 they made a rental profit from the units they developed, declared on the partnership return. Can I bring forward the old losses and set them against the rents? There was no doubt in my mind that I couldn't, but a colleague of mine is adamant that I can - he says because they directly relate to the trade. He's not right, is he?
I left the office at 10.30 last night and I've been back in since 6am. My brain has stopped working.
All help greatly appreciated, as always.