The Earl of Selkirkasked Her Majesty's Government:
Whether any useful purpose is served by preventing under statute losses on either furnished or unfurnished property being set off against each other.
§ Lord Young of GraffhamThe general rule is that tax relief for losses is normally restricted to income from the same activity that generated the loss. The intention of such a rule is to protect the Exchequer from the unrestricted set-off of tax losses against other income. However, as I said in reply to an earlier Question from the noble Earl on 11th February 1988, (Official Report col. 394), a landlord of furnished property can elect to have the income and expenses attributable to the real property separated out from those attributable to the furniture and aggregated with any other income and expenses from unfurnished letting. So, to that extent, a loss on furnished property may be set off against a loss on unfurnished property, and vice versa.