Offsetting losses

[Anthony]

Hi folks,

Property A , I let out and generates profit of about £1500 pa. I can remortgage to reduce this profit but am tied to a mortgage deal and wish to avoid this at the moment.

I have recently bought property B which is currently unlet but when let will initially run at a loss.

I think I understand the rules on mortgage interest, allowable deductions, etc.

The question is am I allowed to offset the losses from property B against the gains from property A?

They are both UK properties and the lets are residential.

Anyone able to shed any light on this?

Thanks for your time,

Anthony

[Melboy]

Not an expert........ but the answer is yes.

Your tax return is based on the total income (profit and loss) from UK Let property.

[plym77]

I am a tax expert and yes, Melboy is right. Any normal Schedule A lettings are all run as one business and so a rental loss made on one property can be offset against the rental profit of another.

This cannot include Furnished Holiday Lets, which are run as a separate business, although I suspect this does not apply to you.

Also remember that it is the mortgage interest that can be deducted, not the whole repayment amount.

Regards

Sherena