Income Tax Act 2007 section 120

Deduction of property losses from general income

Section 120 allows individuals to claim relief for property business losses against their general income, provided the loss has a capital allowances connection or a relevant agricultural connection.

• Losses from a UK or overseas property business may be set against general income if linked to capital allowances or relevant agricultural activities
• The eligible portion of the loss can be deducted from net income in the year the loss arose or the following tax year
• If the loss cannot be fully relieved in the chosen year, a further claim can be made for the other year
• Certain restrictions apply, including limits on tax-generated losses from annual investment allowance, tax-generated agricultural expenses, and losses under the cash basis