Capital Gains Tax on Residential Properties

In the budget on 29th October 2018 there were two significant measures announced that will come into effect from 6.4.2020. These will significantly increase the capital gains tax for property owners selling a property that they have lived in as their principal private residence (PPR).

Firstly the exempt last period of ownership will be reduced from 18 to 9 months. This will by definition increase capital gains tax for any landlord who has been letting out a property that was at some point their PPR for more than 9 months.

Secondly, and more importantly, PPR letting relief is effectively being abolished. Currently this letting relief is up to £40,000 per beneficial owner per property. This measure alone would increase the capital gains tax on the sale of a property owned by two spouses who are higher rate tax payers by over £22,000.

Therefore for some property owners it may make sense to dispose of affected properties before the new rules reducing the relief’s come into force on 6 April 2020.

Kemps are currently offering a service to calculate any such gain under both the current and the new rules so property owners can assess the specific tax impact on them. If you would like to know more about this service please call 01843 861188 and ask to speak to Harry Kemp or email This email address is being protected from spambots. You need JavaScript enabled to view it..


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