Corporation Tax Act 2010

Chapter 4U.K.Property losses

UK property businessesU.K.

62Relief for losses made in UK property businessU.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)Subsection (5) applies if—

(a)not all the loss can be deducted as mentioned in subsection (3), and

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

(5)So far as the loss cannot be deducted, it—

(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.

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

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

(1)This section applies if, in an accounting period, a company with investment business (as defined in section 1218 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.

(2)Subsection (3) applies if, as a result of the company ceasing to carry on the UK property business or to be within the charge to corporation tax in respect of it, an amount of loss made in carrying on that business cannot be carried forward to the next accounting period for the purposes of section 62.

(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 that period or a succeeding period in accordance with that Chapter.

64UK property business to be commercial or carried on for statutory functionsU.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.

65UK furnished holiday lettings business treated as tradeU.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 [F1 (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)F2... 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.

[F3(4A)Chapter 2 applies as if sections 37 to 44 and 48 to 54 were omitted.]

(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.

Overseas property businessesU.K.

66Relief for losses made in overseas property businessU.K.

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

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

(3)For this purpose—

(a)the loss is carried forward to subsequent accounting periods, and

(b)the profits of the business of any such period are reduced by the loss so far as it cannot be used under this paragraph to reduce the profits of the business of an earlier period.

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

67Overseas property business to be commercial or carried on for statutory functionsU.K.

(1)Section 66 applies to an overseas 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) or by or under the law of a territory outside the United Kingdom.

(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.

[F467A EEA furnished holiday lettings business treated as tradeU.K.

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

(2) “ EEA furnished holiday lettings business ” means an overseas 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) in one or more EEA states.

(3)For the purposes of this Part (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 EEA furnished holiday lettings business, and

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

(4)Sections 66 and 67 apply in relation to the company's overseas property business as if the lettings mentioned in subsection (3)(a) were not included in it.

(5)Chapter 2 applies as if sections 37 to 44 and 48 to 54 were omitted.

(6)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.]

[F5Insurance companiesU.K.

67BExclusion in the case of property businesses of insurance companiesU.K.

(1)This Chapter does not apply for the purpose of applying the I - E rules in relation to a loss made by an insurance company in any of its separate UK property businesses or overseas property businesses within section 86(4) of FA 2012.

(2)But in the case of a loss which is referable, in accordance with Chapter 4 of Part 2 of that Act, to the company's basic life assurance and general annuity business, see section 87(3) and (4) of that Act.]