Reduction in final period exemption

From 6 April 2020, the final period exemption, which shelters the final period of ownership from capital gains tax where a property has at some point been the owner’s only or main residence, is reduced from 18 months to 9 months. However, it will remain at 36 months where the owner is disabled or goes into care.

If you are planning to sell a property which has been your only or main residence for some but not all of the period for which you have owned it, speak to us about the benefits of selling before 6 April 2020 to maximise the final period exemption.

Curtailment of lettings relief

Lettings relief is a valuable relief which is available to landlords where they sell a property which has been let out and which has also been the landlord’s only or main residence at some point in the period of ownership.

In its current form, lettings relief will shelter gains of up to £40,000. However, it is to be curtailed significantly from 6 April 2020, and from that date it will only be available where the landlord shares occupancy with the tenant.

If you are thinking of selling a property which has been your main residence at some point and which has been let out, speak to us about the benefits of selling prior to 6 April 2020 to benefit from lettings relief in its current form and also from the 18-month final period exemption.

Capital gains on residential property – changes from 6 April 2020

From 6 April 2020, where a taxpayer makes a capital gain on the sale of a residential property (such as an investment property or a second home), they will need to notify HMRC of the sale on a new return within 30 days of completion. They will also need to make a payment on account of the capital gains tax due. This will bring forward the payment date considerably – currently it is due by 31 January after the end of the tax year in which the gain was realised.

If you are planning to sell a residential property which is not fully covered by private residence relief, contact us now to discuss what these changes will mean for you.