Search Legislation

Finance Act 2011

Status:

This is the original version (as it was originally enacted).

Part 2Corporation tax

CTA 2009

7(1)CTA 2009 is amended as follows.

(2)In section 264 (overview of Chapter)—

(a)after subsection (2) insert—

(2A)It matters whether an overseas property business consists of or includes the commercial letting of furnished holiday accommodation in one or more EEA states for the purposes of—

(a)Chapter 4 of Part 4 of CTA 2010 (relief for property business losses: see section 67A of that Act),

(b)certain provisions of TCGA 1992 (see section 241A of that Act), and

(c)CAA 2001 (see, for example, sections 250 and 250A of that Act).,

(b)in subsection (3), for “the above provisions” substitute “the provisions mentioned in subsection (2)”, and

(c)after subsection (3) insert—

(4)This Chapter also supplements the provisions mentioned in subsection (2A) by providing in certain circumstances for the profits of the EEA furnished holiday lettings part of an overseas property business to be calculated separately (see sections 250 and 250A).

(3)In section 267 (meaning of “qualifying holiday accommodation”)—

(a)in subsection (2), for “140 days” substitute “210 days”, and

(b)in subsection (3), for “70 days” substitute “105 days”.

(4)In section 268 (under-used holiday accommodation: averaging elections)—

(a)in subsection (3), for “70” substitute “105”, and

(b)after subsection (6) insert—

(7)This section is to apply separately in relation to accommodation in the United Kingdom and accommodation in EEA states other than the United Kingdom.

(5)After section 268 insert—

268AUnder-used holiday accommodation: letting condition not met

(1)This section applies if—

(a)during an accounting period a company lets qualifying holiday accommodation,

(b)the accommodation is let by the company—

(i)during the next accounting period, or

(ii)during the next two accounting periods,

(c)the accommodation would (apart from this section) not be qualifying holiday accommodation—

(i)during the accounting period mentioned in paragraph (b)(i), or

(ii)during both of the accounting periods mentioned in paragraph (b)(ii),

only because of a failure to meet the letting condition (see section 267(3)), and

(d)there was a genuine intention to meet the letting condition for the period within subsection (1)(c)(i) or each of the periods within subsection (1)(c)(ii) (as the case may be).

(2)If the company makes an election in respect of that accommodation for any accounting period in respect of which the failure mentioned in subsection (1)(c) occurs, the accommodation is to be treated as qualifying holiday accommodation for that accounting period.

(3)Subsection (2) does not apply for the purposes of section 268 or subsection (1)(a).

(4)If an election is not made for the first of the accounting periods within subsection (1)(c)(ii), an election may not be made for the second.

(5)An election for an accounting period must be made within the period of two years beginning at the end of the accounting period.

(6)References in subsection (1)(a) and (c) to qualifying holiday accommodation include accommodation treated as such under section 268.

(6)In section 269 (capital allowances and loss relief), in the heading, for “relief” substitute “relief: UK property business”.

(7)After section 269 insert—

269ACapital allowances and loss relief: overseas property business

(1)If an overseas property business consists of both—

(a)the commercial letting of furnished holiday accommodation in one or more EEA states (“the EEA furnished holiday lettings part”), and

(b)other businesses or transactions (“the other part”),

this section requires separate calculations to be made of the profits of the EEA furnished holiday lettings part and the other part.

(2)The calculations must be made if—

(a)section 250 or 250A of CAA 2001 (giving effect to allowances and charges) applies to the EEA furnished holiday lettings part or the other part, or

(b)any provision of Chapter 2, 4 or 6 of Part 4 of CTA 2010 (loss relief) applies in relation to a loss made in either of those parts.

(3)If there is a letting of accommodation only part of which is holiday accommodation, such apportionments are to be made for the purposes of this section as are just and reasonable.

(8)In section 748 (assets held for purposes of property business)—

(a)in subsection (4), for paragraphs (a) to (c) substitute—

(a)an ordinary UK property business,

(b)a UK furnished holiday lettings business,

(c)an ordinary overseas property business, or

(d)an EEA furnished holiday lettings business., and

(b)for subsection (5) substitute—

(5)In this section—

  • commercial letting of furnished holiday accommodation” has the meaning given by section 265,

  • “EEA furnished holiday lettings business” means an overseas property business so far as it consists of the commercial letting of furnished holiday accommodation in one or more EEA states,

  • ordinary overseas property business” means an overseas property business except so far as it is an EEA furnished holiday lettings business,

  • ordinary UK property business” means a UK property business except so far as it is a UK furnished holiday lettings business, and

  • UK furnished holiday lettings business” means a UK property business so far as it consists of the commercial letting of furnished holiday accommodation.

CTA 2010

8(1)CTA 2010 is amended as follows.

(2)In section 65 (UK furnished holiday lettings business treated as trade)—

(a)in subsection (3), after “Part” insert “(but as modified below)”,

(b)in subsection (4), omit “Accordingly”, and

(c)after that subsection insert—

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

(3)After section 67 (overseas property business to be commercial or carried on for statutory functions) insert—

67AEEA furnished holiday lettings business treated as trade

(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.

Commencement

9Subject to paragraphs 10 and 11, this Part has effect in relation to accounting periods beginning on or after 1 April 2011.

10Paragraph 7(3) and (4)(a) have effect in relation to accounting periods beginning on or after 1 April 2012 (but do not have effect in relation to relevant periods which begin before, and end on or after, 1 April 2012).

11Paragraph 7(5) has effect where the accounting period mentioned in section 268A(1)(a) of CTA 2009 begins on or after 1 April 2010.

Back to top

Options/Help

Print Options

You have chosen to open The Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open The Whole Act as a PDF

The Whole Act you have selected contains over 200 provisions and might take some time to download.

Would you like to continue?

You have chosen to open the Whole Act

The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

You have chosen to open Schedules only

The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.

Would you like to continue?

Close

Legislation is available in different versions:

Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.

Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.

Close

Opening Options

Different options to open legislation in order to view more content on screen at once

Close

More Resources

Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • correction slips
  • links to related legislation and further information resources
Close

More Resources

Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:

  • the original print PDF of the as enacted version that was used for the print copy
  • correction slips

Click 'View More' or select 'More Resources' tab for additional information including:

  • lists of changes made by and/or affecting this legislation item
  • confers power and blanket amendment details
  • all formats of all associated documents
  • links to related legislation and further information resources