June 2023 to March 2024 exams Watch free ACCA TX lectures
6. Matthew The Property loss for the tax year 2022/23 will be £3,500 calculated as follows:
This is carried forward against future property income only.
Note:
If the expenses on Cottage 1 included mortgage interest payable for 2022/23 of £5,000 none of the
interest payable would be allowed as a deductible expense therefore reducing the expenses to
£9,000 and creating a property income assessment of £1,500. A tax credit however of £1,000 (5,000
x 20%) would reduce the tax liability of Matthew for the tax year.
£ Rental income (5,000 + 4,000 + 1,500)
10,500
Expenses (7,500 + 2,000 + 4,500)
14,000
Property loss
(3,500)
322
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June 2023 to March 2024 exams Watch free ACCA TX lectures
7. Charlie Gross rents do not exceed £7500 (52
×
100 = £5,200) and therefore rent a room relief is still available
in 2022/23 so two possible tax treatments may apply:
1.
Normal calculation
2.
Alternative calculation
Charlie should withdraw the election for 2022/23 so he is allowed a loss of £900 to carry forward
from 2022/23 to 2023/24.
£ Rental income
5,200
less expenses
(6,100)
Property Income loss
(900)
£ Gross rents
5,200
less rent a room relief
(7,500)
Property Income
Nil
323
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