Loss brought forward

Hello! I brought forward a loss in my UK rental property business from the previous year.. This year I made a profit. I have a couple of questions: 1. Do I have to use the full loss from the previous year or I can only use that loss partially to bring my profit below taxable allowance and the rest of loss carry forward? 2. Do I have to use the loss that I brought forward from previous years in full before I use my finance costs?

Hi,

The general rule is that any rental business loss is automatically carried forward and set off against rental business profits of the following year (ITA07/S118 and S119). This is before utilising your personal allowance, any unused property losses can then be carried forward to future years. 

PIM4210 - Losses: setting losses against future profits

With regards to tax relief for finance costs, the reduction is the basic rate value (currently 20%) of the adjusted total income - the income (after losses and reliefs, and excluding savings and dividends income) that exceeds your personal allowance. 

Tax relief for residential landlords: how it's worked out

Thank you.