Source: http://www.legislation.gov.uk/ukpga/2011/11/schedule/14?view=plain
Timestamp: 2013-05-21 18:14:29
Document Index: 380319062

Matched Legal Cases: ['art 1', 'art 3', 'art 3', 'art 4', 'art 4', 'art 3', 'art 3', 'art 2', 'art 4', 'art 4', 'art 3', 'art 3', 'art 2', 'art 4']

Back to full view	Finance Act 2011Previous: ScheduleNext: Schedule Section 52SCHEDULE 14E+W+S+N.I.Furnished holiday lettings Part 1 E+W+S+N.I.Income taxFA 2004E+W+S+N.I.1(1)In FA 2004, section 189 (relevant UK individual) is amended as follows.E+W+S+N.I.(2)In subsection (2), omit the “and” at the end of paragraph (ba), and after that paragraph insert—“(bb)income which is chargeable under Part 3 of ITTOIA 2005 and is immediately derived from the carrying on of an EEA furnished holiday lettings business (whether individually or as a partner acting personally in a partnership), and”.
(3)After subsection (6) insert—“(6A)EEA furnished holiday lettings business” means an overseas property business so far as consisting of the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005) in one or more EEA states.
(6B)If there is a letting of accommodation only part of which is holiday accommodation, just and reasonable apportionments are to be made for the purpose of determining what is comprised in an EEA furnished holiday lettings business.”
ITTOIA 2005E+W+S+N.I.2(1)ITTOIA 2005 is amended as follows.E+W+S+N.I.(2)In section 322 (introduction)—(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)section 312 (deduction for expenditure on energy-saving items: see section 313(3)),
(b)certain provisions of TCGA 1992 (see section 241A of that Act),
(c)CAA 2001 (see, for example, sections 250 and 250A of that Act),
(d)section 189(2)(bb) of FA 2004 (meaning of “relevant UK earnings” for pension purposes),
(e)Part 4 of ITA 2007 (loss relief: see section 127ZA of that Act), and
(f)section 836(3) of ITA 2007 (jointly held property: see exception DA).”,
(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 328A and 328B).”
(3)In section 325 (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 326 (under-used holiday accommodation)—(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 326 insert—“326AUnder-used holiday accommodation: letting condition not met(1)This section applies if—
(a)during a tax year a person lets qualifying holiday accommodation,
(b)the accommodation is let by the person—
(i)during the next tax year, or
(ii)during the next two tax years,
(c)the accommodation would (apart from this section) not be qualifying holiday accommodation—
(i)during the tax year mentioned in paragraph (b)(i), or
(ii)during both of the tax years mentioned in paragraph (b)(ii),
only because of a failure to meet the letting condition (see section 325(3)), and
(d)there was a genuine intention to meet the letting condition for the tax year within subsection (1)(c)(i) or each of the tax years within subsection (1)(c)(ii) (as the case may be).
(2)If the person makes an election in respect of that accommodation for any tax year in respect of which the failure mentioned in subsection (1)(c) occurs, the accommodation is to be treated as qualifying holiday accommodation for that tax year.
(3)Subsection (2) does not apply for the purposes of section 326 or subsection (1)(a).
(4)If an election is not made for the first of the tax years within subsection (1)(c)(ii), an election may not be made for the second.
(5)An election for a tax year must be made on or before the first anniversary of the normal self-assessment filing date for the tax year.
(6)References in subsection (1)(a) and (c) to qualifying holiday accommodation include accommodation treated as such under section 326.”
(6)In section 327 (capital allowances and loss relief), in the heading, for “relief” substitute “ relief: UK property business ”.(7)In section 328 (relevant UK earnings for pension purposes), in the heading, for “purposes” substitute “ purposes: UK property business ”.(8)After section 328 insert—“328ACapital allowances and loss relief: overseas property business(1)If an overseas property business consists of both—
(b)any provision of Part 4 of ITA 2007 (loss relief) applies in relation to a loss made in either of those parts.
328BRelevant UK earnings for pension purposes: overseas property business(1)If an overseas property business consists of both—
(b)other businesses or transactions,
this section requires a separate calculation to be made of the profits of the EEA furnished holiday lettings part.
(2)The calculation must be made if the profits of the EEA furnished holiday lettings part are relevant UK earnings within section 189(2)(bb) of FA 2004.
(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.”
ITA 2007E+W+S+N.I.3(1)ITA 2007 is amended as follows.E+W+S+N.I.(2)In section 117 (overview of Chapter), after subsection (2) insert—“(2A)This Chapter also makes provision for an overseas property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation in one or more EEA states to be treated as a trade for the purposes of this Part (see section 127ZA).”
(3)In section 127 (UK furnished holiday lettings business treated as trade), for subsections (4) to (6) substitute—“(3A)Chapter 2 applies as if sections 64 to 82 and 89 to 95 were omitted.”
(4)After section 127 insert—“127ZAEEA furnished holiday lettings business treated as trade(1)This section applies if, in a tax year, a person carries on an EEA furnished holiday lettings business.
(2)“EEA furnished holiday lettings business” means an overseas property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005) in one or more EEA states.
(3)For the purposes of this Part (but as modified below) the person is treated instead as carrying on in the tax year a single trade—
(a)which consists of every commercial letting of furnished holiday accommodation comprised in the person's EEA furnished holiday lettings business, and
(b)the profits of which are chargeable to income tax.
(4)Chapter 2 applies as if sections 64 to 82 and 89 to 95 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.”
(5)In section 836 (jointly held property), in subsection (3), after exception D insert— “ Exception DA Income arising from an overseas property business which consists of, or so far as it includes, the commercial letting of furnished holiday accommodation (within the meaning of Chapter 6 of Part 3 of ITTOIA 2005) in one or more EEA states. ”CommencementE+W+S+N.I.4Subject to paragraphs 5 and 6, this Part has effect in relation to the tax year 2011-12 and subsequent tax years.E+W+S+N.I.5Paragraph 2(3) and (4)(a) have effect in relation to the tax year 2012-13 and subsequent tax years (but do not have effect in relation to relevant periods which begin before, and end on or after, 6 April 2012).E+W+S+N.I.6Paragraph 2(5) has effect where the tax year mentioned in section 326A(1)(a) of ITTOIA 2005 is 2010-11 or a subsequent tax year.E+W+S+N.I. Part 2 E+W+S+N.I.Corporation taxCTA 2009E+W+S+N.I.7(1)CTA 2009 is amended as follows.E+W+S+N.I.(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,
(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—
(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 2010E+W+S+N.I.8(1)CTA 2010 is amended as follows.E+W+S+N.I.(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.”
CommencementE+W+S+N.I.9Subject to paragraphs 10 and 11, this Part has effect in relation to accounting periods beginning on or after 1 April 2011.E+W+S+N.I.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).E+W+S+N.I.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.E+W+S+N.I. Part 3 E+W+S+N.I.Capital allowancesCAA 2001E+W+S+N.I.12(1)CAA 2001 is amended as follows.E+W+S+N.I.(2)After section 13A (use for other purposes of plant or machinery previously used for long funding lease) insert—“13BUse for other purposes of plant or machinery: property businesses(1)This section applies if a person who has been using plant or machinery for the purposes of a relevant qualifying activity—
(3)In section 15 (qualifying activities)—(a)in subsection (1)(b), after “ordinary” insert “ UK ”,(b)in subsection (1)(c), for “furnished” substitute “ UK furnished ”,(c)in subsection (1)(d), for “overseas” substitute “ ordinary overseas ”,(d)after subsection (1)(d) insert—“(da)an EEA furnished holiday lettings business,”,
(e)in subsection (3)(a), after “ordinary” insert “ UK ”, and(f)in subsection (3)(b), for “overseas” substitute “ ordinary overseas ”.(4)In section 16 (ordinary property business)—(a)in the heading, after “ordinary” insert “ UK ”,(b)after “ “ordinary” insert “ “ UK ”, and(c)for “furnished” substitute “ UK furnished ”.(5)In section 17 (furnished holiday lettings businesses)—(a)in the heading, for “Furnished” substitute “ UK furnished ”,(b)in subsection (1), for “ “furnished” substitute “ “UK furnished”, and(c)in subsection (2), after “All” insert “ such ”.(6)After section 17 insert—“17AOrdinary overseas property businessIn this Part “ordinary overseas property business” means an overseas property business except in so far as it is an EEA furnished holiday lettings business.
17BEEA furnished holiday lettings businesses(1)In this Part “EEA furnished holiday lettings business” means an overseas property business which consists in, or so far as it consists in, the commercial letting of furnished holiday accommodation in one or more EEA states.
(7)In section 28(1) and (2) (thermal insulation of buildings)(a)after “ordinary” insert “ UK ”, and(b)for “overseas” substitute “ ordinary overseas ”.(8)In section 33(8) (personal security)—(a)in paragraph (b), after “ordinary” insert “ UK ”,(b)in paragraph (c), for “furnished” substitute “ UK furnished ”,(c)in paragraph (d), for “overseas” substitute “ ordinary overseas ”, and(d)omit the “or” at the end of paragraph (d), and after that paragraph insert—“(da)an EEA furnished holiday lettings business, or”.
(9)In section 35(1) (expenditure on plant or machinery for use in dwelling-house not qualifying expenditure in certain cases)—(a)in paragraph (a), after “ordinary” insert “ UK ”, and(b)in paragraph (b), for “overseas” substitute “ ordinary overseas ”.(10)In section 63(3) (cases in which disposal value is nil)—(a)in paragraph (b), after “ordinary” insert “ UK ”,(b)in paragraph (c), for “furnished” substitute “ UK furnished ”,(c)in paragraph (d), for “overseas” substitute “ ordinary overseas ”, and(d)omit the “or” at the end of paragraph (d), and after that paragraph insert—“(da)an EEA furnished holiday lettings business, or”.
(11)In section 248 (ordinary property businesses)—(a)in the heading, after “Ordinary” insert “ UK ”, and(b)after “ordinary” insert “ UK ”.(12)In section 249 (furnished holiday lettings businesses)—(a)in the heading, for “Furnished” substitute “ UK furnished ”, and(b)in subsection (1), for “furnished” substitute “ UK furnished ”.(13)In section 250 (overseas property businesses)—(a)in the heading, for “Overseas” substitute “ Ordinary overseas ”, and(b)for “overseas” substitute “ ordinary overseas ”.(14)After section 250 insert—“250AEEA furnished holiday lettings businesses(1)If the qualifying activity of a person who is entitled or liable to an allowance or charge for a chargeable period is an EEA furnished holiday lettings business, the allowance or charge is to be given effect in calculating the profits of that business by treating—
(15)In section 536(5)(a) (contributions not made by public bodies and not eligible for tax relief)—(a)in sub-paragraph (i), after “ordinary” insert “ UK ”,(b)in sub-paragraph (ii), for “furnished” substitute “ UK furnished ”,(c)in sub-paragraph (iii), for “overseas” substitute “ ordinary overseas ”, and(d)after sub-paragraph (iii) insert—“(iiia)an EEA furnished holiday lettings business;”.
(16)In Schedule A1 (first-year tax credits)—(a)in paragraph 5(1), for “a UK property business other than a furnished holiday lettings business” substitute “ an ordinary UK property business or an ordinary overseas property business ”,(b)in paragraph 11(1), for “or a furnished holiday lettings business” substitute “ , a UK furnished holiday lettings business or an EEA furnished holiday lettings business ”,(c)in paragraph 12(1), for “a UK property business other than a furnished holiday lettings business” substitute “ an ordinary UK property business or an ordinary overseas property business ”,(d)in paragraph 20—(i)in sub-paragraph (a), for “or a furnished holiday lettings business” substitute “ , a UK furnished holiday lettings business or an EEA furnished holiday lettings business ”, and(ii)in sub-paragraph (c), for “a UK property business (other than a furnished holiday lettings business)” substitute “ an ordinary UK property business or an ordinary overseas property business ”, and(e)in paragraph 21(1)—(i)for “a UK” substitute “ an ordinary UK ”, and(ii)for “overseas” substitute “ ordinary overseas ”.(17)In Part 2 of Schedule 1—(a)omit the entries for “furnished holiday lettings business” and “ordinary property business”, and(b)at the appropriate place insert—“EEA furnished holiday lettings businesssection 17B”“ordinary UK property businesssection 16”“ordinary overseas property businesssection 17A”“UK furnished holiday lettings businesssection 17”CommencementE+W+S+N.I.13This Part has effect—E+W+S+N.I.(a)for corporation tax purposes, in relation to chargeable periods beginning on or after 1 April 2011, and(b)for income tax purposes, in relation to chargeable periods beginning on or after 6 April 2011. Part 4 E+W+S+N.I.Chargeable gainsTCGA 1992E+W+S+N.I.14(1)TCGA 1992 is amended as follows.E+W+S+N.I.(2)In section 241 (furnished holiday lettings)—(a)in the heading, for “Furnished” substitute “ UK furnished ”,(b)in subsection (3A), omit “Schedule 6 (retirement relief etc)”, and(c)in subsection (4), after “furnished holiday accommodation” insert “ in the United Kingdom ”.(3)After that section insert—“241AEEA furnished holiday lettings(1)The following provisions of this section shall have effect with respect to the treatment for the purposes of tax on chargeable gains of the commercial letting of furnished holiday accommodation in EEA states other than the United Kingdom.
Commencement etcE+W+S+N.I.15Subject to paragraph 16, this Part has effect—E+W+S+N.I.(a)for corporation tax purposes, in relation to disposals made in accounting periods beginning on or after 1 April 2011, and(b)for capital gains tax purposes, in relation to disposals made on or after 6 April 2011.16Section 241A of TCGA 1992, so far as it applies for the purposes of section section 253 of that Act, has effect—E+W+S+N.I.(a)for corporation tax purposes, in relation claims made on or after 1 April 2011, and(b)for capital gains tax purposes, in relation to claims made on or after 6 April 2011.17(1)In relation to disposals within paragraph 15 and claims within paragraph 16, section 241A of TCGA 1992 is to be treated as having had effect on and after 1 January 1994 in determining, for the purposes of any of the provisions referred to in section 241A(5) of that Act, whether a trade was carried on in any period beginning on or after that date.E+W+S+N.I.(2)Sub-paragraph (3) has effect, for the purposes of sub-paragraph (1), in relation to any expression in section 241A of TCGA 1992 which is defined by reference to any provision of ITTOIA 2005, ITA 2007, CTA 2009 or CTA 2010.(3)As respects any time before the coming into force of that provision, that expression is to have the meaning that it had under the enactments in force at that time.