Taxes Consolidation Act 1997 section 384

Relief under Case V for losses

Section 384 provides for the carry forward of unrelieved Case V (rental) losses against future rental income, with capital allowances taking priority over carried-forward losses in the order of set-off.

• A Case V loss arises where the total rental deficiencies for the year exceed the total rental surpluses; the excess is carried forward against Case V income of subsequent years.
• A carried-forward loss must be set off in the earliest year in which there is assessable Case V income, with any unrelieved balance carried forward to the next year, and so on.
• Current-year capital allowances attributable to rental property must be deducted before any carried-forward Case V loss is applied.
• Where a clawback of section 23-type relief occurs, the carried-forward loss is reduced by the clawback amount to prevent the same amount being deducted twice.