Tax Law
A sole trader made a trade loss in tax year 2023/24 of £50,000. In the same year, she had property income from a portfolio of investment residential properties of £10,000 and realised a gain of £80,000 from the sale of on of these investment properties.
The sole trader had trade profits in the prior year of £20,000 and is predicted to generate future trade profits of £20,000 per annum.
Can the 2023/24 trade loss of £50,000 be offset against the 2023/24 gains of £80,000?
A sole trader made a trade loss in tax year 2023/24 of £50,000. In the same year, she had property income from a portfolio of investment residential properties of £10,000 and realised a gain of £80,000 from the sale of on of these investment properties.
The sole trader had trade profits in the prior year of £20,000 and is predicted to generate future trade profits of £20,000 per annum.
Can the 2023/24 trade loss of £50,000 be offset against the 2023/24 gains of £80,000?
Yes, but the trader would need to use it against the property income in the same year, ignoring the personal allowance, before using what remains against the gain.
(B) Yes, but the trader would need to use it against the property income in the same year, ignoring the personal allowance, before using what remains against the gain. A sole trader who has generated a trade loss may use this trade loss against any gains but only after they have made a claim against income in the same tax year.
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