Chapter 4: Losses from property businesses
393.This Chapter provides relief for losses from property businesses.
Section 117: Overview of Chapter
394.This section provides an overview of the Chapter. It is new.
395.Subsection (1) lists the types of relief available for property losses and refers to the various sections where the details of the reliefs and associated miscellaneous provisions can be found.
396.Subsection (2) highlights the fact that a UK property business, so far as it consists of the commercial letting of furnished holiday accommodation, is treated as a trade for loss relief purposes.
Section 118: Carry forward against subsequent property business profits
397.This section provides relief for property losses against property business income of later years. It is based on sections 379A and 379B of ICTA.
398.Section 272 of ITTOIA specifies that the same rules apply in calculating profits and losses of a property business as apply for calculating profits and losses of a trade. So rewriting section 379A(7) of ICTA is unnecessary. See the reference to section 272 of ITTOIA in section 59.
Section 119: How relief works
399.This section explains how the deductions are made. It is based on sections 379A(1) and 379B of ICTA.
Section 120: Deduction of property losses from general income
400.This section provides relief for property losses against general income, if the loss has a capital allowances or relevant agricultural connection. It is based on sections 379A and 379B of ICTA.
Section 121: How relief works
401.This section explains how the deductions are made. It is based on sections 379A and 379 B of ICTA.
Section 122: Meaning of “the applicable amount of the loss”
402.This section defines “the applicable amount of the loss”, with the effect that a claim by a person for property loss relief against general income is restricted to the lesser of the loss itself and the amount arising from the relevant connection. It is based on sections 379A(4) and 379B of ICTA.
Section 123: Meaning of “the loss has a capital allowances connection” and “the business has a relevant agricultural connection”
403.This section defines the meaning of “the loss has a capital allowances connection” and “the business has a relevant agricultural connection”. It is based on section 379A and 379B.
Section 124: Supplementary
404.This section provides the time limit for making a claim under section 120 and supplementary matters if a claim is made. It is based on sections 379A(3) and 379B of ICTA.
Section 125: Post-cessation property relief
405.This section provides relief for payments of certain expenses etc after a property business has ceased (and for which relief would not otherwise be available). It is based on section 109A and section 110 of ICTA.
406.A claim for post-cessation property relief is possible if a person ceases carrying on a UK property business and within seven years makes a qualifying payment (see section 97) or a qualifying event occurs in relation to a debt of the business (see section 98).
Section 126: Treating excess post-cessation property relief as CGT loss
407.This section is a signpost to a capital gains tax relief that may be available where there is insufficient income to absorb an amount claimed by way of post-cessation property relief. It is new.
Section 127: UK furnished holiday lettings business treated as trade
408.This section provides, subject to modifications, the same range of reliefs for a loss from a UK furnished holiday lettings business as is available for a trade loss. It is based on section 504A of ICTA.
409.Subsection (4) applies Chapter 2 (trade losses) with the omission of the section restricting the availability of trade leasing allowances, as an individual letting furnished holiday accommodation cannot lease out equipment as part of that business.
410.Subsections (5) and (6) deny early trade loss relief to an individual in respect of a tax year if any of the accommodation was first let by the individual as furnished accommodation more than three years before the start of the tax year.