POSSIBLE CHANGES TO CGT PRIVATE RESIDENCE RELIEF
The government is currently consulting on important changes to private residence relief that are likely to be introduced from 6 April 2020.
The two possible changes, announced in the Autumn 2018 Budget are:
- Firstly to limit to just 9 months the period prior to disposal that counts as a period of deemed occupation.
- The second is to limit “letting relief” to periods where the taxpayer is in shared occupation with the tenant.
Final period exemption to be reduced
The final period exemption was for many years three years and was always intended cover situations where the taxpayer was “bridging” and waiting to sell their previous residence. However, 36 months was felt to be too generous and was allegedly being abused by a strategy known as “second home flipping”. As a result the final period relief was restricted to the current 18 month period of deemed occupation a couple of years ago. The latest proposal is to restrict still further to 9 months although it will remain at 36 months for those with a disability, and those in or moving into care.
Possible Lettings Relief Changes
