Tax repayment possible?

[LostInTaxation]

Hello

I let out a flat I used to live in for roughly the 2015/16 tax year. I submitted returns for the 2014/15 year (as the tenancy started in this year) and have done ever since. Every year I have made a substantial loss for different reasons, except for 2015/16 when I had to pay against the profit I had made. My issue is that I have made losses ever since, not had any tenant in place because the first set were dreadful, and so decided I won't let the flat out again. I'll instead sell it as soon as possible (Brexit uncertainty is making this difficult).

Is there any way I can claim the tax payment from 2015/16 back, as it was a substantial amount of money and the losses since more than outweigh it? Perhaps through amending the 2016/17 return before the 31st this month?

Or should I just submit another return up to the point it was no longer available for rent? My understanding is that I can only roll forward the losses and use them either against profits from another rental property in my name or against capital gains tax?

Please let me know what you think I can do!

Many thanks

[bd6759]

Your question is a little confusing, but you seem to have answered your own question.

Losses are carried forwards, not backwards. So your 2016-17 loss cannot be used againsrv2015-16 income.

The loss cannot be set against CGT. It is lost once your rental business ceases.

[LostInTaxation]

Could you clarify what you find confusing please?

Does anyone have any other thoughts?

[darthblingbling]

You cannot carry back losses from a property business

[bd6759]

Might just ne me. I found it difficulty to follow the question.

You seem to be saying that you have made losses whilst not actually having a property business. Expenditure you incur on a second home can only create a tax loss if it is incurred in the course of a property business.

But in any event, you are correct to say that allowable loses are only carried forward (not backwards), and then only set against future profits of the same business that caused them.

[LostInTaxation]

No, the losses have been genuine - I effectively had to gut the flat after the tenants left it in an awful condition and the contractor took a very long time to sort it out. Appreciate this is an unusual situation.

Given the costs the tenants caused me, I don't know why I cannot reclaim the tax, as the "profit" I gained from them was almost non existent in the end.

So it seems that the tax payment is lost forever, unless I rent out the flat again and use it to offset future income. The only issue I was unaware of was claiming capital allowances (my mistake for mixing this with CGT), but I doubt this helps as I couldn't go back to HMRC and say I should have claimed this in 2015/16 and had a lower tax bill at this point, can I?

[LostInTaxation]

You cannot carry back losses from a property business

Carry back? What does that mean?