Corporation Tax Act 2010

UK property businesses U.K.

62 Relief for losses made in UK property business U.K.

(1) This section applies if, in an accounting period, a company carrying on a UK property business makes a loss in the business.

(2) Relief for the loss is given to the company under this section.

(3) The relief is given by deducting the loss from the company's total profits of the accounting period.

(4) [F1 Subsections (5) to (5C) apply] if—

[F2 (a) an amount of the loss is not deducted as mentioned in subsection (3) or surrendered by way of group relief under Part 5,]

(b) the company continues to carry on the UK property business in the next accounting period.

(5) [F3 The amount]—

(a) is carried forward to the next accounting period, and

(b) is treated for the purposes of this section as a loss made by the company in the UK property business in that period.

[F4 (5A) But relief under subsection (2) for the amount is given to the company in the next accounting period only on the making by the company of a claim.

(5B) A claim may relate to the whole of the amount or to part of it only.

(5C) A claim must be made—

(a) within the period of two years after the end of the next accounting period, or

(b) within such further period as an officer of Revenue and Customs may allow.

(5D) In the application of this section to an amount of a loss previously carried forward under subsection (5), the reference in subsection (4)(a) to group relief under Part 5 is to be read as a reference to group relief for carried-forward losses under Part 5A.]

(6) Relief under this section is subject to restriction or modification in accordance with provisions of the Corporation Tax Acts.

Textual Amendments

F1 Words in s. 62(4) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 13(2)(a)

F2 S. 62(4)(a) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 13(2)(b)

F3 Words in s. 62(5) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 13(3)

F4 S. 62(5A)-(5D) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 13(4)

Modifications etc. (not altering text)

C1 S. 62 excluded (with effect in accordance with Sch. 18 para. 63 of the amending Act) by Finance Act 2016 (c. 24), Sch. 18 para. 20(14)

63 Company with investment business ceasing to carry on UK property business U.K.

(1) This section applies if, in an accounting period, a company with investment business (as defined in [F5 section 1218B] of CTA 2009)—

(a) ceases to carry on a UK property business or to be within the charge to corporation tax in respect of such a business, but

(b) continues to be a company with investment business.

[F6 (2) Subsections (3) to (7) apply if an amount of loss made in carrying on the UK property business would be carried forward to the next accounting period under section 62(5) but for the company ceasing to carry on the business or to be within the charge to corporation tax in respect of it.]

(3) The amount of loss—

(a) is, nevertheless, carried forward to the next accounting period, and

(b) is treated for the purposes of Chapter 2 of Part 16 of CTA 2009 as an expense of management deductible for [F7 the next accounting] period or a succeeding period in accordance with that Chapter.

[F8 (4) But a deduction in respect of the amount of loss may be made under section 1219 of CTA 2009 for the next accounting period only on the making by the company of a claim.

(5) A claim may relate to the whole of the amount of the loss or to part of it only.

(6) A claim must be made—

(a) within the period of two years after the end of the next accounting period, or

(b) within such further period as an officer of Revenue and Customs may allow.

(7) Subsection (1A) of section 1219 of CTA 2009 does not apply in relation to a deduction in respect of the amount of loss made for the next accounting period.]

Textual Amendments

F5 Words in s. 63(1) substituted (15.9.2016) by Finance Act 2016 (c. 24), s. 55(b)

F6 S. 63(2) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 14(2)

F7 Words in s. 63(3)(b) substituted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 14(3)

F8 S. 63(4)-(7) inserted (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 14(4)

64 UK property business to be commercial or carried on for statutory functions U.K.

(1) Sections 62 and 63 apply to a UK property business only so far as it is carried on—

(a) on a commercial basis, or

(b) in the exercise of functions conferred by or under an Act (including an Act of the Scottish Parliament).

(2) A business (or part) is not carried on on a commercial basis unless it is carried on with a view to making a profit or so as to afford a reasonable expectation of making a profit.

(3) If during an accounting period there is a change in the way in which a business (or part) is carried on, it is treated as having been carried on throughout that period in the way in which it is being carried on by the end of that period.

65 UK furnished holiday lettings business treated as trade U.K.

(1) This section applies if a company carries on a UK furnished holiday lettings business.

(2) “UK furnished holiday lettings business” means a UK property business so far as it consists of the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 4 of CTA 2009).

(3) For the purposes of this Part [F9 (but as modified below)] the company is treated as carrying on a single trade—

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

(b) in relation to which the profits are chargeable to corporation tax under Chapter 2 of Part 3 of CTA 2009.

(4) F10 ... sections 62 to 64 apply in relation to the company's UK property business as if the lettings mentioned in subsection (3)(a) were not included in it.

[F11 (4A) Chapter 2 applies as if the following were omitted—

(a) sections 37 to 44,

(b) the words “beginning before 1 April 2017” in section 45(1),

(c) sections 45A to 45H, and

(d) sections 48 to 54.

(4B) Any deduction made under section 45(4)(b) from the profits of the trade treated as carried on under this section is to be ignored for the purposes of section 269ZB (restriction on deductions from trading profits).]

(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.

Textual Amendments

F9 Words in s. 65(3) inserted (with effect in accordance with Sch. 14 para. 9 of the amending Act) by Finance Act 2011 (c. 11), Sch. 14 para. 8(2)(a)

F10 Word in s. 65(4) omitted (with effect in accordance with Sch. 14 para. 9 of the amending Act) by virtue of Finance Act 2011 (c. 11), Sch. 14 para. 8(2)(b)

F11 S. 65(4A)(4B) substituted for s. 65(4A) (with effect in accordance with Sch. 4 para. 190 of the amending Act) by Finance (No. 2) Act 2017 (c. 32), Sch. 4 para. 155(2)