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

Relevant UK earnings for pension purposes: overseas property business

Section 328B requires a separate profit calculation for the furnished holiday lettings part of an overseas property business in the European Economic Area, where the business also includes other activities, so that the relevant UK earnings for pension purposes can be properly identified.

• Where an overseas property business combines commercial letting of furnished holiday accommodation in EEA states with other business or transactions, the profits of the EEA furnished holiday lettings part must be calculated separately.
• This separate calculation is required where the profits qualify as relevant UK earnings for pension relief purposes under section 189(2)(bb) of the Finance Act 2004.
• Where only part of a property is used as furnished holiday accommodation, any apportionment of income and expenses must be made on a just and reasonable basis.
• The provision was introduced by Finance Act 2011 and amended by Finance Act 2025.