Italian holiday island company adopting Channel Islands? It’s light-hearted stuff (9)
I believe the answer is:
capriccio
'light-hearted stuff' is the definition.
(light-hearted or lively piece of music)
'italian holiday island company adopting channel islands?' is the wordplay.
'italian holiday island' becomes 'capri'.
'company' becomes 'co' (abbreviation).
'adopting' is an insertion indicator.
'channel islands?' becomes 'ci'.
'co' going around 'ci' is 'ccio'.
'capri'+'ccio'='CAPRICCIO'
'it's' acts as a link.
(Other definitions for capriccio that I've seen before include "Lively composition" , "Music written free of convention" , "Lively work" , "Kind of free composition" , "Lively and free musical piece" .)