Valid from 06/04/2005
[F1504ALetting of furnished holiday accommodation treated as trade for certain income tax purposesU.K.
(1)For the purposes specified in subsection (2)—
(a)a UK property business which consists in, or so far as it consists in, the commercial letting of furnished holiday accommodation is treated as if it were a trade the profits of which are chargeable to income tax under Part 2 of ITTOIA 2005, and
(b)all such lettings made by a particular person or partnership or body of persons are treated as one trade.
The “commercial letting of furnished holiday accommodation” has the same meaning as it has for the purposes of Chapter 6 of Part 3 of ITTOIA 2005.
(2)Subsection (1) applies for the purposes of—
(a)Chapter 1 of Part 10 (loss relief for income tax),
(b)section 833(4)(c) (income regarded as earned income), and
(c)section 189(2)(b) of the Finance Act 2004 (income regarded as relevant UK earnings for pension purposes).
(3)Chapter 1 of Part 10 as applied by this section has effect with the following adaptations—
(a)no relief is to be given to an individual under section 381 (relief for losses in early years of trade) in respect of a year of assessment if any of the accommodation in respect of which the trade is carried on in that year was first let by that person as furnished accommodation more than three years before the beginning of that year of assessment;
(b)section 384 (restrictions on right of set-off) has effect with the omission of subsections (6) to (8) (which relate to certain losses attributable to capital allowances);
(c)section 390 (treatment of interest as loss) has effect as if the reference to a trade carried on wholly or partly in the United Kingdom were a reference to the UK property business so far as it is treated as a trade.
(4)If there is a letting of accommodation only part of which is holiday accommodation, such apportionments are to be made for the purposes of this section as are just and reasonable.
(5)Relief is not to be given for the same loss, or the same portion of a loss, both under a provision of Chapter 1 of Part 10 as applied by this section and under any other provision of the Income Tax Acts.]
Textual Amendments
F1S. 504A inserted (6.4.2005 with effect in accordance with s. 883(1) of the amending Act) by Income Tax (Trading and Other Income) Act 2005 (c. 5), Sch. 1 para. 197 (with Sch. 2)