Splitting property loss?

Question from Sam updated on 17th July 2012:

I own a rental property that is making quite a significant loss. I got married last year and have been off work for the past eight months as I have had a baby. I am wondering if I will be able to claim the loss on our rental property solely against my husband's salary as he is paying the highest tax rate? Or will I need to split the loss and put half against my small earnings this year? When getting assessed for benefits the Government looks at household income so using this principle I think it would be fair to claim the total loss against my husbands income? Could you please give me some advice?

Our expert Mark Withers responded:

Unfortunately if the property is yours then the tax loss must be claimed in your return. If your income is insufficient to cover the loss, the loss will carry forward and be available to offset your income in future. If you are not likely to be generating income in the future it may be best to look at a full restructure of your affairs by looking at matrimonial property issues, estate planning and tax .

Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.

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