Goodier Smith and Watts

Devonshire House
Manor Way, Borehamwood
Hertfordshire, WD6 1QQ

Search News


Autumn Budget 2018 – Private Residence Relief

Source: HM Revenue & Customs | | 30/10/2018

As a general rule, there is no Capital Gains Tax (CGT) on a property which has been used wholly as a main family residence. This relief from CGT is commonly known as Private Residence Relief. Conversely, an investment property that has never been used as a main residence will not qualify.

Two changes to the way Private Residence Relief works were announced as part of the Budget measures. The Chancellor confirmed that two ancillary reliefs are to be amended, potentially reducing the amount of CGT relief available on the sale of a relevant property.

  1. Currently, if a property has been occupied at any time as an individual’s private residence, the last 18 months of ownership are disregarded for CGT purposes. This relief applies even if the individual was not living in the property when it was sold. From April 2020, this final exempt period will be reduced from 18 months to 9 months. There will be no change to the 36 months exempt period available for those that are disabled or moving into care homes.
  2. Home owners that let all or part of their house may not benefit from the full Private Residence Relief but can benefit from letting relief of up to £40,000 (£80,000 for a couple). From April 2020, lettings relief will be reformed. This change means that lettings relief will only be available to those property owners who are in shared occupancy with a tenant.

The Chancellor also announced a change to the CGT rules on the sale of a residential property. Going forward, if CGT is due, a payment on account will be required. The new rules will apply from April 2019 for non-UK residents and April 2020 for UK residents. This change will mainly affect individuals who are disposing of a second home or rental property. However, there will be exceptions including the limitations to Private Residence Relief mentioned above which result in CGT falling due, and for non-residents.



 

Latest News

More about Debt Relief Orders
23/04/2019 - More...
Last week we posted that it is over 10 years since Debt Relief Orders (DROs) were first introduced in April 2009. This

Maternity pay explained
23/04/2019 - More...
How much maternity leave can you take? If you work as an employee and become pregnant you are eligible to take up to 52

How to register as self-employed
23/04/2019 - More...
Are you self-employed? HMRC’s guidance says that you are probably self-employed if you: run your business for

Newsletter

With our newsletter, you automatically receive our latest news per e-mail and get access to the archive including advanced search options!

» Sign up for the Newsletter
» Login

 

 

ICAEW-BLK RGB  

 

Save

Save

Copyright © 2019 - Goodier, Smith and Watts

Cookie Policy | Website Privacy Policy                                                                                                                                                                                                                                                         

Registered in England under the number 3724657