Income Tax Act 2007 section 127ZA

EEA furnished holiday lettings business treated as trade

Section 127ZA treats a furnished holiday lettings business carried on within the European Economic Area (but outside the UK) as if it were a trade, specifically for the purposes of claiming loss relief.

• An EEA furnished holiday lettings business is an overseas property business involving the commercial letting of furnished holiday accommodation in one or more EEA countries, as defined by Chapter 6 of Part 3 of ITTOIA 2005.
• For loss relief purposes, all such lettings across the EEA are treated as a single, continuous trade whose profits are chargeable to income tax.
• Loss relief is available under Chapter 2, but the general sideways loss relief rules in sections 64 to 82 and the rules in sections 89 to 95 do not apply — only the specific provisions of this section are relevant.
• Where only part of a property qualifies as furnished holiday accommodation, a fair and reasonable apportionment must be made to determine which portion falls within the EEA furnished holiday lettings business.

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