Property loss

[her_maj]

Hi, my first time on here so hoping someone can help.

I have recently sold (tax year 2017/18) a property, which when I take off estate agent and solicitor fees, have made a loss compared to its original purchase price. My first question is do I need to include this on a self assessment form?
I have been registered for self assessment as I was renting out this property but stopped during the last tax year (2016/17) for which I have submitted my tax return.

As I have made a loss on the property this tax year, am I able to take that off the gain I made for last year and so pay less tax for 2016/17?

Hope that made sense?

Thank you

[bd6759]

The capital loss on the sale of the proeprty cannot be used to reduce income.

The loss can be carried forward and used againt any capital gain you make in the future. You must declare the loss in this year's tax return in order to carry it forward.

[maths]

You don’t have to report losses straight away - you can claim up to 4 years after the end of the tax year that you disposed of the asset.

[bd6759]

s42(2) TMA requires a claim to be made in a return if a s8 notice has been given.

[maths]

TMA 1970 s42(2) provides the administrative/procedural mechanism for making a claim but it does not dictate the time limit for making a claim which is contained in s43.

It would be nonsensical given that the time limit for making claims per s43(1) is 4 years after the relevant year of assessment to then dictate that a claim must be made in the Tax Return required for completion pursuant to s8.

Your interpretation of s42(2) would mean that if a capital loss arose in tax year 16/17 it would need to be included in the Tax Return for 16/17 required under s8 and claimed therein which would impose a deadline of 31 October 2017/31 January 2018 (or the deadline for filing an amendment) which cannot be correct.

[bd6759]

TMA 1970 s42(2) provides the administrative/procedural mechanism for making a claim but it does not dictate the time limit for making a claim which is contained in s43.

It would be nonsensical given that the time limit for making claims per s43(1) is 4 years after the relevant year of assessment to then dictate that a claim must be made in the Tax Return required for completion pursuant to s8.

s42 requires that where notice is given under s8, the claim must be made in the return. s43 is subject to any other provion. s42 is such an other provision.

Your interpretation of s42(2) would mean that if a capital loss arose in tax year 16/17 it would need to be included in the Tax Return for 16/17 required under s8 and claimed therein which would impose a deadline of 31 October 2017/31 January 2018 (or the deadline for filing an amendment) which cannot be correct.

Why can it not be correct? If I made a gain in 16/17 I would need to declare it by 31/10/17 or 31/1/18. Why would I need more time to declare a loss? In any event, s42 gives until 31/1/19 to claim the loss.

[maths]

We are clearly not going to agree.

The reference to s43 is subject to any other provision only where such other provision "prescribes a longer or shorter period". S42 does not do so.

S42 merely provides the mechanism for lodging a claim.

Capital losses can be claimed up to 4 years from the end of the relevant year of assessment. In your example of a loss in 16/17 a claim may be lodged no later than 5 April '21. In fact whether i receive a s8 notice or not the deadline of 4 years remains the same.