Paragraph 16 Carry-forward of losses: income tax

United Kingdom

(1)

(a)

a person is treated as carrying on in the tax year 2024-25 a single trade by virtue of section 127 (3) of ITA 2007 (UK furnished holiday lettings businesses) or section 127ZA (3) of that Act (EEA furnished holiday lettings businesses),

(b)

the person has made a loss in that trade in the tax year 2024-25 or a previous tax year,

(c)

relief for the loss has not been fully given under Chapter 2 of Part 4 of ITA 2007 (trade losses) or any other provision of the Income Tax Acts, and

(d)

the person carries on a corresponding property business in the tax year 2025-26.

(2)

So much of the loss as has not been relieved is to be treated for the purposes of section 118 of ITA 2007 (carry forward against subsequent property business profits) as if it had been made in the corresponding property business.

(3)

In this paragraph, “corresponding property business” means—

(a)

in relation to a loss made in a trade a person is treated as carrying on by virtue of section 127 (3) of ITA 2007, a UK property business (within the meaning given by section 264 of ITTOIA 2005) carried on by that person;

(b)

in relation to a loss made in a trade a person is treated as carrying on by virtue of section 127ZA (3) of ITA 2007, an overseas property business (within the meaning given by section 265 of ITTOIA 2005) carried on by that person.