Income Tax (Trading and Other Income) Act 2005 section 265

Overseas property business

Section 265 defines what constitutes an overseas property business for income tax purposes.

• An overseas property business covers all businesses a person carries on to generate income from land outside the United Kingdom, plus any standalone transactions entered into for the same purpose.
• The definition mirrors that of a UK property business, with the sole difference being that the land is located outside rather than inside the United Kingdom.
• Where a person carries on both a foreign trade and holds foreign property, trading income takes priority over overseas property income — the opposite of the rule for UK property, where property income takes priority over trading income.
• Questions about whether foreign land arrangements amount to an overseas property business are resolved by interpreting overseas land law in accordance with section 363 of the Act.