EEA Furnished property let - Claim relief on foreign tax

Hi have an EEA Furnished. It is in the first year and it made a loss. However, Italy witheld 21% tax on the gross income. I therefore paid £2300 Euro of Tax in Italy. However the UK liability on the property because of the loss is 0. I have other UK tax liability greater than £2300. Can I claim £2300 tax relief as the EEA Furnished let would have not attracted any UK tax but I had to pay tax in Italy? Or I can only add the tax into the EEA Holiday let costs and de-fact reduce the loss by a smaller amount - but can't claim tax relief. ie. reduce my overall UK tax liability by £2300?

Hi massi,
Thank you for your question. I would advise you that you will not be able to  claim any Foreign Tax Credit Relief (FTCR) as the actual UK tax due on your foreign rental income is NIL. You would therefore claim the FTCR as a deduction against the same foreign rental income. This will effectively give you a credit for the foreign tax paid and will also give you a larger loss to carry forward to the next tax year. Please refer to the helpsheet HS263 for further guidance : Relief for foreign Tax Paid 2022 (HS263)
Thank you.

Thank you...that's what I was thinking...