While any gain on the sale of a property that has been the taxpayer’s main residence throughout the period of ownership is covered by private residence relief, the flip side is that if the main residence is sold at a loss, the loss is not an allowable loss for capital gains tax purposes.
Under the cash basis, capital expenditure can be deducted unless the disallowance is specifically prohibited (as in the case in relation to cars and land and property). Under the accruals basis, a deduction is not given for capital expenditure, although in limited cases capital allowances may be available.
The cash basis for unincorporated landlords will apply if none of the Tests A to D above are met and the landlord has not made an election for the accruals basis (Test E) to apply.
The cash basis tests are applied separately to each unincorporated property business. There is no requirement that the same basis must be used for all businesses.
Apex House, Calthrope Road,
Birmingham B15 1TR
01217286427
