I owned a rental property. In the tax year 2024/25, it made a profit and will incur income tax. The property was sold in May 2025. Significant renovation costs were incurred, which would generate a tax loss in 2025/26. These would cover the tax I need to pay for 2024/25. Is there any way I can offset backwards to mitigate the 2024/25 tax year profits? Or am I destined to lose the tax losses generated in 2025/26? I have paid the capital gains tax due on the profits following the sale. 

Arthur Weller replies:  

Property business losses cannot be carried back to a previous year; they can only be offset against current year property business profits, and if that is not possible, they can be carried forward to offset against future property business profits. However, if this rental property that you sold in May 2025 was your only rental property, this means that your rental business ceased in May 2025 (NB. there are ‘sideways’ reliefs against general income – but these only apply in certain circumstances).