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Property allowance claim

Hopefully just a quick one

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Hi everyone

Just a brief query for you all - can you please confirm that I'm correct in thinking that residential landlords have the option to switch between claiming or not claiming the property allowance of £1,000 year on year, depending on which is taxably beneficial to them?

Also - any previous year residential property losses are still able to be offset in a year that a landlord chooses to utilist the property alloance?

E.g. 

Rental income £,5000

Property allowance (£1,000)

Property losses brought forward (£2,000)

Profit to tax £2,000

TIA

Replies (9)

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RLI
By lionofludesch
06th Dec 2021 10:28

I vote yes and yes

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By Truthsayer
06th Dec 2021 10:31

Yes and yes.

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By mbee1
06th Dec 2021 10:42

And another yes and yes

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By Tax Dragon
06th Dec 2021 10:56

It is indeed yes and yes - once you have checked that the allowance is available (ie none of the exclusions applies - eg you don't get the allowance if there's a tax reduction for finance costs).

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Replying to Tax Dragon:
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By Hugo Fair
06th Dec 2021 11:00

Which is where the unrepresented taxpayer most often gets this wrong.

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Replying to Hugo Fair:
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By Paul Crowley
06th Dec 2021 11:49

The trouble is because we know that £1,000 is for everything, it would be easy to forget that others may just read the headline

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Replying to Tax Dragon:
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By Moo
06th Dec 2021 16:33

Isn't it the other way round, if you claim the allowance any brought forward finance costs vanish from the return? At least I think that's what happens with our software.
Agree you don't seem to get relief for the current year finance costs if you claim the allowance so finance costs may give better result.

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Replying to Moo:
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By Hugo Fair
06th Dec 2021 18:07

I think they're both the "same way round".
It's not a matter of precedence, just a binary choice (like a radio-button, you can have either but not both).

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Replying to Moo:
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By Tax Dragon
06th Dec 2021 19:12

Re in year, it depends whether a taxpayer entitled (s274A word) to a reduction is equally entitled not to have it. That would be a plain reading but I have a feeling courts may have said otherwise (in a different context... if it comes back to me, I'll post... there may be nothing to come back, could be a ghost in the brain.)

On the other hand, the PA excluding provision refers to an actual reduction, not an entitlement to a reduction - had it done that, I would have been able to answer your question with certainty, ghost or no ghost.

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