Finance Act 2011

ITA 2007 U.K.

3 (1) ITA 2007 is amended as follows. U.K.

(2) In section 117 (overview of Chapter), after subsection (2) insert—

“(2A) This Chapter also makes provision for an overseas property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation in one or more EEA states to be treated as a trade for the purposes of this Part (see section 127ZA).”

(3) In section 127 (UK furnished holiday lettings business treated as trade), for subsections (4) to (6) substitute—

“(3A) Chapter 2 applies as if sections 64 to 82 and 89 to 95 were omitted.”

(4) After section 127 insert—

“127ZA EEA furnished holiday lettings business treated as trade

(1) This section applies if, in a tax year, a person carries on an EEA furnished holiday lettings business.

(2) “EEA furnished holiday lettings business” means an overseas property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005) in one or more EEA states.

(3) For the purposes of this Part (but as modified below) the person is treated instead as carrying on in the tax year a single trade—

(a) which consists of every commercial letting of furnished holiday accommodation comprised in the person's EEA furnished holiday lettings business, and

(b) the profits of which are chargeable to income tax.

(4) Chapter 2 applies as if sections 64 to 82 and 89 to 95 were omitted.

(5) If there is a letting of accommodation only part of which is furnished holiday accommodation, just and reasonable apportionments are to be made for the purpose of determining what is comprised in the trade treated as carried on.”

(5) In section 836 (jointly held property), in subsection (3), after exception D insert— “ Exception DA Income arising from an overseas property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005) in one or more EEA states. ”