Income Tax (Trading and Other Income) Act 2005 section 328A

Capital allowances and loss relief: overseas property business

Section 328A requires separate profit calculations for overseas property businesses that include both EEA furnished holiday lettings and other property activities, so that capital allowances and loss relief can be applied correctly to each part.

• Where an overseas property business combines EEA furnished holiday lettings with other property activities, the profits of each part must be calculated separately.
• Separate calculations are required where capital allowances under sections 250 or 250A of CAA 2001 apply, or where loss relief under Part 4 of ITA 2007 is relevant to either part.
• If a property is used partly for furnished holiday letting and partly for other purposes, any apportionment between the two parts must be made on a just and reasonable basis.
• The section was introduced by Finance Act 2011 and amended by Finance Act 2025, reflecting the special tax treatment historically afforded to qualifying furnished holiday lettings in EEA states.