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Thanks for your reply.
Does 'expenses' in your reply cover the financial cost, specifically interest on the capital borrowed to purchase the property ?
For example, if some of the financial cost is not needed (to get the money earned and liable for tax below £12570 one year) can it be used in later years ?
This question is about Self Assessment (SA100) and the rules governing carrying forward any unused allowance, 'expenses' and financial costs.
Unfortunately I haven't found the answer to my questions and so would appreciate assistance.
This question relates to a UK tax payer (currently) owning a single property that they rent out.
This rental income is this person's only income.
Please let me give an example:
Rent received for the year: £12,000
Allowable Expenses : £1,200
Interest repayment on loan to buy the rented property (amount tapered to 20%): £1,400
Because the rent received is below the allowance (£12,570) no tax is payable.
My question is how much (if any) of the unused allowance (£12,570 - £12,000), unneeded Expenses (£1,200) and unneeded (20% of) Interest repayment (£1,400), can be carried forward to the next year's self assessment ?
('unneeded' meaning that because the calculated tax for the year was £0 there was no need to use allowable Expenses and Interest repayment to reduce it).
Additionally, if anything can be carried forward, for how many years can this be done ?
If this person was to buy another property to rent out they would want to take advantage of the years of accumulated Expenses etc, if possible.
Thanks in advance.