I have a limited company which has been trading for 30 years and has never made a loss. I own and rent out my own property. In the most recent financial year the company had rental income of £100,000 and allowable expenditure in the same period of £170,000. During the same period the company sold three rental properties. After deductions (including indexation allowance), the total profits chargeable to tax from the sale of the three properties equalled £65,000. Does this equate to an overall loss for the financial year of £5,000 (and therefore no tax is due), or are the property sales treated separately to the rental income and expenditure?

Arthur Weller replies:
If you look at HMRC’s Company Taxation manual at www.gov.uk/hmrc-internal-manuals/company-taxationmanual/ctm04505, it states that a trading loss of a company can be set against total profits of the current accounting period. Total profits include chargeable gains. So, the overall loss for the financial year is £5,000, and therefore no corporation tax is due, as you have written.