What does "ring-fencing" mean especially in relation to property claims?
By Marc Sevitz · Updated
What does this option mean? Everything I've read about it is incredibly confusing and full of legal jargon I don't understand. Under what circumstances should you select "yes" or "no" and how does this affect your final tax calculation? I'm asking this in relation to property for which you receive rental income although this option will still be available for any other trade.
This can get very complicated however the basic principle is that you could ringfence the rental income loss to only apply to rental income profits in future years to reduce the tax paid on that profit. This would be a decision you wish to make, but in essence by selecting to ringfince the loss you are delaying the tax benefit of the loss.