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  • Tax

    Paying tax on ‘profits’

    Newby question...

    I’m renting out my old property that I used to live in and am about to complete my first tax assessment.

    it states I need to pay tax on any ‘profit’ however due to circumstances I am losing money and having to subsidise the costs and therefore are making and ‘profit’

    i understand there are deductible costs but as I’m not making profit do I need to pay tax?

    thanks

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    Your post was some time ago so i don't know whether you got an answer to your query.

    Im not an expert and it is difficult to comment without knowing the details.

    If you have done your calculations correctly and the costs you are deducting are allowable and you are actually making a loss, then no, you shouldnt need to pay tax on your losses.  (I think there are a number of useful HMRC videos to help landlords understand what cost are allowable / now allowable.)  However, losses can be carried forward and offset against profits in future periods, so it is worth calculating and keeping a record.  You may need to claim to carry forward the losses - i cant remember - you need to have a look in the HMRC instructions / guidance for this.


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