Lettings relief changes and other exemptions April 2020
Two changes to the way Private Residence Relief works are due to come into effect from April 2020. These changes could reduce the amount of CGT relief available on the sale of a private residence. The changes are:
1.Home owners that let all or part of their house may not benefit from the full Private Residence Relief, but can benefit from letting relief of up to £40,000 (£80,000 for a couple). The relief is not available on a ‘buy to let’ property in which a taxpayer never lived. From April 2020, lettings relief will be reformed. This change means that lettings relief will only be available to those property owners who are in shared occupancy with a tenant.
2.Currently, if a property has been occupied at any time as an individual’s private residence, the last 18 months of ownership are disregarded for CGT purposes. This relief applies even if the individual was not living in the property when it was sold. From April 2020, this final exempt period will be reduced from 18 months to 9 months. There will be no change to the 36 months exempt period available for those that are disabled or moving into care homes.
Clients that may be adversely affected by the above changes might benefit from a disposal in 2019-20, before the reductions in relief apply.
Posted by Cassey Nixon on
1st February 2019
Do You Need To Submit A Tax Return?
There are a number of reasons why you may need to register with HMRC to submit a tax return. This could include: if you are self-employed and earning more than £1,000 per year from the self-employed activity, if you are a company director, if you have an annual income over £100,000 and / or if […]
Tax And Lease Premiums
Where a freeholder (or landlord) of a property grants a new lease to a new tenant there are sometimes upfront payments due, usually known as a lease premium. The payments of these premiums are increasingly popular, and the tax implications can be complicated depending on the length of the lease. For leases of 50 years […]