Question:
I have a home mortgage and a second property that I rent out. I am also self-employed and will have a tax liability of around £14,000 to pay coming up. The second property is currently worth around £20,000 less than I paid for it. If I were to sell the second property now for a £20,000 loss could I take that off my £14,000 tax bill?
Arthur Weller replies:
See www.hmrc.gov.uk/manuals/cgmanual/CG15810.htm that capital losses of an individual can generally only be set against capital gains in the same tax year or in future years. They cannot be used to offset against an income tax liability resulting from self-employed profits.
