Published: 25/09/2019 By Sarah Jane CreanIf you are selling a second property which at one your time was your main residence you need to be aware of the changes to various Capital Gains Tax reliefs available to you which come into force from 6th April 2020.
Firstly, if you rent out a property following a period of occupation you can currently claim lettings relief, when working out your capital gains tax liability, and the reduction could be up to £40,000. However from 6th April 2020 this relief will be restricted to periods where the owner was in shared occupancy with the tenant. It is estimated that this will effect around 40,000 people.
Secondly, the final period exemption for private residence relief is being reduced to 9 months from the current 18 months. However there is not a change for disabled people and those who go into residential care where the final exemption period will remain at 36 months.
Changes to both these rules will affect the amount of capital gains tax you will have to pay on disposal of a property after 6th April 2020 so if you need further information please give us a call or get in touch via our contact us form on our website.
These changes do not affect landlords of buy to let properties who have never lived in the properties that they have rented out.