Make sure you plan ahead!
From April 2020 the rules surrounding capital gains on a main residence that you own are changing and it may mean that you have to pay tax on the sale of your property.
After this date, a fundamental change to how letting relief is provided could have a critical impact on the amount you make from a sale – especially if you are a higher rate taxpayer.
Currently, letting relief allows you to sell a home free of capital gains tax if it has at some point:
- Been used as your only or main residence
- Been wholly or partly let to another person during your ownership
However, from April next year, this relief will only apply if the property owner is in a shared occupancy with another person who is renting, such as a lodger in the room of a house with access to shared areas, at the point of sale.
The change will also come in at the same time as a reduction in the final exemption period for main residence relief, which will be reduced from 18 to just nine months.
These two factors combined may mean that if you sell your home after April 2020 and have at some point let the property out while not living in it, you may no longer benefit from capital gains relief.
These changes will affect property owners differently depending on their circumstances, so they must seek expert advice at the earliest opportunity.
More details about these changes can be found here.
We are standing by to help, please call us today to find out how we can assist you.