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We know that we can set losses incurred while renting a property against the profits from another property or carry it forward. On the other hand, the losses from renting holiday letting we can set only against profit from holiday letting. What about rent a room losses ? Can we set it against overall renting profits or only against rent a room profits ? It is not clear from the lectures.
Losses cannot arise under the rent a room scheme – in order for a loss to arise the taxpayer would need to set aside the rent a room relief scheme and revert to the normal calculation of rental income where presumably the allowable expenses would exceed the rental income and thus give a loss – this would then be treated as a normal property income loss.