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Tax Insider Tip: Dormant Periods
16/12/2016, by Tax Insider, Tax Tips - Property Tax
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Losses from a rental business can only be set against future profits if the business is a continuing business.

In some instances, it will not be clear as to whether a rental business has ceased as the activities may stop and then restart. HMRC apply a general ruling by which they regard the ‘old’ rental business as ceasing if there is a gap of at least three years between lets and different properties are let in the taxpayer’s old and new letting activities.

Thus, a rental business is not normally treated as having ceased simply because the property is not let for a period to allow for repairs or renovations.

However, the business may be treated as having ceased and then recommencing should the property be used as the taxpayer’s main residence between lets.

The losses of a ceased rental business cannot be set against the profits of a ‘new’ rental business.

This is a sample tip taken from our 112 page guide:

101 Tax Tips For Landlords 2016/17

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The above article is taken from 'Tax Insider,' TaxationWeb's own publication specifically for taxpayers and their advisors. 'Tax Insider' is a monthly magazine containing numerous tax tips, articles, questions and answers from leading tax experts, aimed at helping taxpayers to save tax and reduce their liabilities.

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