Tax on a property I make a loss on

[kellinho]

Hi I'm new to this forum so please forgive me if I post in the wrong place or do anything wrong.

My wife and I bought a flat in 2007 but we outgrew it and after failing to sell last year we decided to buy a house,change the flat mortgage to interest only and rent it out. We were naive when we bought the flat and had a 100% mortgage.The flatis now worth less than what we paid hence we can't get a better mortgage on it due to lack of equity and so the rent we receive exactly covers the interest mortgage payments ie we break even but pay off no capital.

However, the flat also has a service charge of more than £100 a month so in effect this is just wasted money to us.
My wife and I have full time jobs but of a weekend I have a different part time job for which I have to do a self assessment form at this time of year. I don't really know what I'm doing to try and reduce the tax payments-I put some food/clothing expenses(very basic things) through but I would like to know can I reduce any tax I pay due to this service charge being an expense?I know I do not live in the flat but it is still an expense I pay and see no benefit from it.

If so how do I go about this?I've seen people making their living in property income can reuce their tax payments by offsetting these service charges against their property profit. But as I have no property profit how can I bring the service charge to link in with the part time job I have and the self assessment for that income?I'm not sure how it is done given my regular and part time work have nothing to do with property.

I'd be grateful for any help as the flat makes me feel I haemhorrage money. If I can clarify things anymore please let me know
Thank you
Pete

[mullet]

If you make a loss on property income then you can only carry that loss forward against future profit. You cannot claim it against employment income. Some expenses and losses can be relieved, others cannot. Unfortunately this sounds like a "dead" loss in that you can't do anything with it.

And do be careful about claiming food and clothing against income - are they genuine business expenses or just the costs of normal living?