Question:
I've a property jointly owned with my wife. Since 2006, we had made rental losses that were carried forward. During 2010-11, we made an individual rental profit of £449 on which we are asked to pay 20% tax. Why do we still have this tax liability if there is still rental loss?
Arthur Weller Replies:
I assume that you registered your rental losses with HMRC by entering them on the UK property pages of your self assessment tax return each year since 2006. If so you should have no problem in using the brought forward losses to cancel out the gain of £449 in 2010-11. The remaining brought forward losses not used in 2010-11 can be carried forward to 2011-12 and future years. See box 37 on the 2010-11 UK property supplementary pages of the self assessment return.
