Can I offset a loss on my trade against my other income ?

CAN I USE A LOSS ON MY TRADE AGAINST OTHER INCOME ?

Yes, it’s called S.381 loss tax relief

If you are self-employed or part of a partnership and you make a loss in a tax year, you can offset that loss against your other income such as P60 or rental income.  This could generate a tax refund.

Also if you are married, you can use this loss if not used up against your spouse’s income.

From a tax planning point of view for start up businesses which are expected to make a loss in the first year of trading, it could be a way of getting a tax refund to fund the business in the early stages.

Like all tax reliefs, it is subject to a few catches listed below

• Farmers can only get it for a max of 3 years
• Has to be claimed within 2 years of tax year when loss was made
• Trade has to be taken on a commercial basis
• If only takes you less than 10 hours a week working on trade, then the loss relief is restricted
• Loss relief restricted to property developers
• Losses incurred before you begin to trade cannot be used

Any queries on the above give me a call on 091 763817 or email me at oliver@taxreturnhelp.ie