Setting Off Loss on Sale of Land Against Other Income

Question

A client bought land. The intention was to sell for a profit. He sold the land after two years, and made a loss.

The question is whether he can use the loss to offset other income, such as salary and interest etc.

Answer

A From 1 October 2015 gains from the disposal of residential land acquired and disposed of within two years is taxable which has now been extended to five years. Losses arising from the bright-line test will be ring- fenced so that they may only be used to offset taxable gains from other land sales.

If the land in question was commercial property and the intention was to develop and sell for a profit then the loss, because of a change in circumstances will be tax deductible.