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Can you offset your earnings from capital gains

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I rented out two properties, and sold them both last year.  As the business never made a profit last year can I offset my personal allowance against the capital gains I earnt?

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01st Jul 2019 00:31

1. You can’t “earn” Capital Gains
2. The Personal Allowance is for income tax
3. There is a separate exemption for Capital Gains.

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01st Jul 2019 09:36

[sigh] ©

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01st Jul 2019 09:46

No, although the CG threshold may be an option.

Out of curiosity, is ‘never made a profit last year’ the same as ‘made a loss’? Devil is in the detail ...

I presume that the ‘business’ you mention is either a sole-trader or unincorporated partnership business, separate from your rental properties? Whilst it’s possible, I would surmise (on the assumption that you don’t have an accountant) unlikely that your rental properties are a ‘business’ for tax purposes. Tax IS taxing.

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to atleastisoundknowledgable...
01st Jul 2019 09:57

atleastisoundknowledgable... wrote:

Out of curiosity, is ‘never made a profit last year’ the same as ‘made a loss’?

"Never" and "Didn't" are considered synonymous in some areas of England. Particularly West Lancashire.

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to lionofludesch
01st Jul 2019 10:02

Ah, but tax is definitive, not open to local colloquiums.

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to atleastisoundknowledgable...
01st Jul 2019 10:38

I think you mean colloquialisms.

I would also have thought from the OP that "the business" was the rental one. If not, yours is a good question. The range of interpretations (to what is surely one of the simplest questions ever asked) shows yet again (as if further evidence were needed) that, whilst this forum might usefully discuss technical issues, it's no place to gain advice.

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to Tax Dragon
01st Jul 2019 11:16

“I would also have thought from the OP that "the business" was the rental one”

I agree, it is a fair assumption, which we all made. I was just trying to sound clever and make the point.

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01st Jul 2019 10:42

Yes. That's fine.

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By SXGuy
to Vile Nortin Naipaan
01st Jul 2019 11:34

Is it?

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to SXGuy
01st Jul 2019 11:47

SXGuy, ask yourself how the OP might try to make the claim.

If it is a claim.

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to SXGuy
02nd Jul 2019 15:58

Yes. There's a special rule that applies to the OP.

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By TTd
02nd Jul 2019 12:32

Two houses were purchased in order to rent them out - that was the business. When the houses were sold (both last year) the business made a loss (as we had no-one renting and had to do alot of work to get them into a sellable state - decorating etc. ) Can we use any of the capital gains to offset this loss? Or is Capital Gains entirely separate?

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to TTd
02nd Jul 2019 16:25

Perhaps, given that you don't appear to know what a business is, you need to consult an accountant to help you?

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to TTd
02nd Jul 2019 17:28

Take an accountant's advice and seek the advice of an accountant.

The question you ask really is not the only issue in the scenario you describe.

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to TTd
02nd Jul 2019 17:33

TTd wrote:
Or is Capital Gains entirely separate?

The clue is in it having a completely different name.

Just saying, like.

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to lionofludesch
02nd Jul 2019 18:38

That's super-simplistic. It's not like you to be so antihelpful.

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to Tax Dragon
02nd Jul 2019 18:45

OK - it's got a different name. It's a different tax.

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to lionofludesch
03rd Jul 2019 09:16

Hi Lion, sorry I didn't get back to you last night – I had some Dragonesses to cheer on.

It is a different tax. But it has a fairly symbiotic relationship with income tax. Huge numbers of transactions are within the scope of both. Sometimes losses for one tax can be relieved against the other.

Just saying, like.

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to Tax Dragon
03rd Jul 2019 09:22

Tax Dragon wrote:

Hi Lion, sorry I didn't get back to you last night – I had some Dragonesses to cheer on.

Wales were playing, were they ?

Point taken.

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to lionofludesch
03rd Jul 2019 10:12

England and Wales have a fairly symbiotic relationship. I like to think we (are allowed to) support each other's teams.

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03rd Jul 2019 14:24

There may be a very long shot argument that if you spent £11k worth of work (in terms of the value of your time) on improving the properties and you effectively get the PA that way via the £11k uplift on your CGT base cost. I once saw that possibility mentioned in a case. I forget which one.

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