Part 4Loss relief
Chapter 4Losses from property businesses
Carry-forward property loss relief
C1118Carry forward against subsequent property business profits
1
Relief is given to a person under this section if the person—
a
carries on a UK property business or overseas property business (alone or in partnership) in a tax year, and
b
makes a loss in the business in the tax year.
2
The relief is given by deducting the loss in calculating the person's net income for subsequent tax years (see Step 2 of the calculation in section 23).
3
But a deduction for that purpose is to be made only from profits of the business.
4
In calculating a person's net income for a tax year, deductions under this section from the profits of a business are to be made before deductions of any other reliefs from those profits.
5
No relief is to be given under this section so far as relief for the loss is given under section 120.
6
This section needs to be read with section 119 (how relief works).
119How relief works
This section explains how the deductions are to be made. The amount of the loss to be deducted at any step is limited in accordance with section 25(4) and (5).
Step 1
Deduct the loss from the profits of the business for the next tax year.
Step 2
Deduct from the profits of the business for the following tax year the amount of the loss not previously deducted.
Step 3
Continue to apply Step 2 in relation to the profits of the business for subsequent tax years until all the loss is deducted.