I re-mortgaged a buy-to-let (BTL) property and extracted equity to purchase another off-plan property. This off-plan development went bust, and I lost the deposit. Can I make an allowance of this loss against the BTL property I used to finance this failed investment, either in a self-assessment return against rental income or in the future when I sell against capital gains?  

Arthur Weller replies:  

Assuming that when you purchased your rights in this off-plan development you acquired an asset that had a market value, and that now it has become of negligible value, you can claim a negligible value capital loss as per HMRC’s Capital Gains manual (at CG13120p). This means that if, in the future, you make a capital gain, you can use this brought forward capital loss to reduce the capital gain.