Income Tax Act 2007

127 UK furnished holiday lettings business treated as trade

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

(2) “UK furnished holiday lettings business” means a UK 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).

(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 UK furnished holiday lettings business, and

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

(4) Chapter 2 applies as if section 75 (trade leasing allowances given to individuals) were omitted.

(5) Early trade losses relief is not available to an individual for a loss made in a tax year if the individual first let any of the relevant accommodation as furnished accommodation more than 3 years before the beginning of the tax year.

(6) Accommodation is relevant if the trade that is treated as carried on in the tax year consists of or includes the letting of the accommodation.

(7) 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.