If it is logical for USC to be charged on income that ignores a previous loss why then is it not logical to charge USC on the whole gross rental income, i.e. income before any costs ?
Surely, a previous year's loss is treated in the same way as a cost in any annual accounting procedure ?
If Revenue don't accept the C/F loss argument then , from now on , anyone making a loss in 2012 should try,instead, to break-even and push forward the loss to 2013 -e.g. postpone the repairs, painting, purchases till January. From the normal tax point of view it makes no difference when the cost was incurred if it can be B/F , but from this USC thing it will surely help -as would a bit of clever accounting.
Does my waffle make any sense ?
Exactly Gervan.
If this year I were to make a loss of 5.000 euros because my expences were greater than my income then normally I would not care about declaring a profit of 5.000 euros next year because the loss of this year would be carried forward and there'd be no tax.
But with USC I would pay 7% of next year's income.
So, obviously I would ensure that expenditure would be such that there'd be zero profit each year, thus saving a few hundred euros on USC. It's not that hard and I wonder if landlords realise how they can save money this way.
(I fully understand its a means of catching section 23-type investors , though it would seem to dishonour the whole basis of section23 legislation. But why penalise landlords who have genuinely lost money in previous years -like OP, when ,finally, they make some profit ?)
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