Readers' forum : Furnished holiday let

My client is engaged in a UK furnished holiday letting and has incurred losses. These losses can be attributed to valid capital allowances arising from claims to annual investment allowance on furniture white goods and so on. I have indicated to my client that FA 2011 restricted sideways loss relief from holiday lettings and that such losses can now only be carried forward against any future profits from this business.

My client has challenged this approach asking me to identify what is the statutory basis for denying him a claim under ITA 2007 s 120 (property loss relief against general income) for losses with a capital allowances connection.

Clearly a furnished holiday letting is a UK property business (ITTOIA 2005 s 264). ITTOIA 2005 s 327 dealing with capital allowances and loss relief for such lettings makes clear that the calculations need to be...