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  • Tax

    Loss carried forward - choice of attribution?

    One of our group is selling their single property into our group SPV. On completion she will have a revenue loss remaining which we understand can only be carried forward to offset against any property income she may receive in the future. This is unlikely so is it therefore possible to convert the loss from being a revenue charge to a capital cost to off set against CGT?

    Is there an element of choice in how to attribute costs? For example she had 9 tatty kitchen units  which she replace with exactly 9 new units, actually like for like. As this was like for like she charged them as renewal but could she designate them as a capital improvement instead?

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    Sorry you need to be much clearer on what the situation is before people can advise you properly. SPV for example is a vehicle but what type?

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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022

    Stuart. Thanks for speedy response.

    The SPV Ltd. is code 68100, 68209 and 68320.

    However does the SPV Ltd. have any bearing on the remaining loss for carrying forward?



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    Whether an item is capital or revenue is a matter of fact but in practice it is often a grey area.So it may be possible to recategorise some of the repairs (income tax) as capital (CGT).

    Is she claiming incorporation relief though? Does she qualify?

    If we are talking about standard BTL property income then revenue losses can be carried forward for use against profits of the same business (further restricted if it is let to a connected party). It is not available for carry back purposes or against her other income.

    You really should be seeking advice for this sort of thing - particularly if you are running a form of collective investment.


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    Chartered Accountant, Tax Advisor and Mortgage broker

    (and BTL portfolio owner)

    stuart@johnsonsca.com

    02039077022