30 October 2018
Patricia Mock, Tax Director, comments on private residence relief:
“Private Residence Relief exempts gains made on disposals of property which has been occupied by the taxpayer as their only or main home. Gains made on properties which haven’t been occupied as the taxpayer’s main home for their whole period of ownership may also be relieved wholly or partially. This includes a relief to exempt gains relating to the final period of ownership regardless of whether the property was occupied by the owner or not. Another relief exempts part of a gain where the home in question was not occupied by the owners because it was rented out.
“Restrictions to both these reliefs were announced in yesterday’s Budget. From April 2020 the exempt period before a property is sold will be cut from 18 months to nine months - subject to exemptions for disabled homeowners or those moving into care, for whom the period will remain at 36 months. The ‘lettings relief’ of up to £40,000 will also be restricted and will only apply to homeowners who have shared the home with their tenants.
“When they come in, these changes will affect those who have moved out of their property more than nine months before it is sold at a gain, and any homeowners who have moved out to rent their property before selling at a gain. Live-in landlords and those who have never occupied the properties they are renting out will be unaffected. All homeowners should be aware of these changes. Sales before 6 April 2020 should not be affected.”
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