If you sell the home in which you live there is normally no Capital Gains Tax to pay on any increase in the value of the property during your ownership as you can claim Principal Private Residence relief (‘PPR’).
Where you have moved out of the property but retain ownership, you can still claim PPR when you come to sell for periods during which you lived there.
Furthermore, you can claim lettings relief of up to £40,000.00 (£80,000.00 per couple) to set off against any Capital Gains arising on sale.
In our article posted on 6 November 2018, we informed you that as a consequence of announcements in the 2018 Autumn Budget Statement the government is significantly reducing the benefit of these valuable reliefs from April 2020.
More detail can be found in our previous article and on Her Majesty’s Revenue and Customs website.
These changes are due to come into effect from April 2020 so if you are an owner likely to be caught by these changes you should consider your options now and plan accordingly. Dependent on your tax position, it could be beneficial to sell your property before the new changes come into effect.
If you would like any advice in relation to the matters raised in this article or relating to buy to let or furnished holiday lettings please contact Glyn Evans on 01934 637911 or email evans@powellslaw.com.
