Income Tax Act 2007 section 118

Carry forward against subsequent property business profits

Section 118 allows individuals who make a loss in a UK or overseas property business to carry that loss forward and set it against future profits from the same business.

• A person who carries on a UK or overseas property business (alone or in partnership) and makes a loss in a tax year can carry that loss forward to future tax years
• The loss can only be deducted from profits of the same property business — it cannot be set against other types of income
• When calculating net income for a tax year, property loss deductions under this section take priority over any other reliefs that might apply to those same business profits
• No relief is available under this section to the extent that relief for the same loss has already been given under section 120, which deals with deducting property losses from general income