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UK Property Tax Portal
UK Property Tax Q&A
Can I offset rental losses against other partners income?
Question
My wife has a BTL property in her name, which returns £300 per month taxable gains after all expenses.
1) She is about to purchase a flat, which initially will make a monthly loss after expenses of £100. Can this £100 be offset against the £300 leaving a taxable balance of £200? 2) If as I suspect she can, would I also be able to take advantage of this situation if I was to purchase the flat in my name instead of hers? Ian Says: Firstly, provided the flat is rented out on the same basis as the first one, then the profit and loss from both properties are added together to determine the overall rental profit, so the loss can be offset against the profit. Secondly, if you purchase the property in your own name then you will have a loss of £100 per month and your wife will have a profit of £300. This means that you will end up having a loss to carry forward against future rental profits and your wife will incur tax on the £300. This does not seem particularly sensible. Dependent on your relative incomes, it may be advisable to hold both properties in joint names to utilise all your allowances. 
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