It is entirely possible that you can make a loss on a rental property, for example if you had a lot of problems with the property or you offered a rent free period.

The tax man does have a heart.  If you own a rental property that made a loss you will not pay tax for that particular tax year and you can carry the loss forward to later tax years and set that loss off against future profits.

If you own more than one property, then you must accumulate all the profits and losses on your properties for the tax year so any losses are automatically used up.  You can’t pick and choose how you use or carry forward your losses!

Anita is a Chartered Accountant, turned blogger and creator of the ever popular free Go Self Employed Email Mini Course, which has been completed by hundreds of attendees all over the UK. Using her 10 years experience in accounting, tax and operations for Small Businesses, Anita is on a mission to make finance simple for the self employed, so they can stop stressing about tax & finances and focus on building profitable businesses which will give them the lifestyle they dream of.