Property business losses for companies

Produced by Tolley in association with of Crane Dale Tax, part of AMS Group

Corporation Tax

Guidance

Streaming of losses in companies

For accounting periods ending before 1 April 2025, there are four property loss streams ― those of UK and overseas ‘ordinary’ rental businesses, and those of furnished holiday letting (FHL) UK, and FHL EEA sources. FHL status can only apply to a UK or EEA business but not any other overseas business. For accounting periods beginning on or after 1 April 2025, the FHL regime will be abolished, see the Furnished holiday lets guidance note.

A single ordinary rental business stream can comprise both residential and commercial lets, so long as they are all in the UK or otherwise all overseas. Overseas ordinary rentals are lumped together and are not further sub-streamed into different overseas jurisdictions.

UK non-FHL losses

Under these rules, UK non-FHL property income loss relief for companies is provided as follows:

•
the net loss from a UK property rental trade will first be set off against the company’s total profits for the period concerned. Note that this effectively

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Rob Durrant-Walker

Tax Director at Crane Dale Tax , Corporate Tax, OMB, Personal Tax

Rob is a cross-tax advisor with a particular focus on property tax planning, and business structure planning for OMB’s. He provides tax advice to other accounting firms, balancing commerciality, ethics, and understanding complexity. His 30+ years of experience start at the Inland Revenue in Hull. After completing his ATT and CTA by 1999 with PKF, he subsequently worked at KPMG and UHY prior to managing the business tax team as a director at Garbutt + Elliott. Rob is now Tax Director at the independent tax consultancy, Crane Dale Tax. He is a regular author for Taxation magazine with many articles and Readers Forum contributions since 2005, and he contributes as a virtual member to the CIOT Property Tax technical committee. Rob works remotely from Vancouver in Canada.

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