Many landlords and owners of second properties may find themselves paying Capital Gains Tax on the sale of any second property from 6th April 2020, following a change to Private Residence Relief.
Where it applies, Private Residence Relief covers the time spent living in the property plus an additional period of relief called the final period exemption. The relief allows people to sell what has previously been their main residence without incurring a capital gain tax charge, or at least substantially reducing the tax.
Changes to the relief were announced in the 2018 Budget and then confirmed in the subsequent Finance Bill 2019/20. The final period exemption is being reduced from 18 months to 9 months from 6th April 2020 and this means that many more property disposals will be bought into the scope of Capital Gains Tax.
Timing in terms of selling the property becomes even more important. Carrington provides a useful service whereby we analyse the likely CGT liability prior to a sale, look for any ways of mitigating this and advise on the most tax efficient timing of a sale.
Contact us for more information.