April 2020 will see changes introduced to reliefs relating to Capital Gains Tax (CGT) on the disposal of your home – potentially resulting in an increased payment of CGT.
Usually the sale of you home is expect from CGT as it is classed your Principle Private Residence (PPR), but this will not be the position in every case.
Amongst the proposed changes we have picked out three which we feel are the most significant: –
- The letting of a property that was previously your PPR – After the 5th April 2020 lettings relief will only be applicable where the owner has shared the property with their tenant. In our experience this is an extremely rare situation and unlikely to affect many if any of you reading this. This change will effectively abolish relief on your home that has been let after you have moved out and then sold.
- Final Periods of Exemption – Currently a homeowner has eighteen months (exempt period) to sell their house after moving out. From April 2020 this is due to drop to just nine months.
- Payment of CGT – Currently you have until the 31st January in the year following the end of the year in which the gain occurred, to pay your CGT. The proposed April 2020 changes will mean that CGT will need to be paid on the sale of residential properties within thirty days of the sale completing.
We advise anyone who feels that they may be affected by these changes to discuss the matter with a suitably knowledgeable accountant. This is just a summary of what could be a complex accounting situation for which we cannot advise in detail. Bear in mind that selling a property that you wish to move from, or no longer reside in, prior to April 2020 could save you an increased CGT bill.