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Published on 24 May 2019

Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs


LITRG has raised concerns to the government over the impact of its proposals to restrict private residence relief for capital gains tax from April 2020. Among other changes, the government wishes to halve the final exemption period (again) from 18 months to 9 months, and restrict the availability of lettings relief to periods where the owner is in occupation of the tenant, even for periods prior to April 2020. Both changes increase the scope of capital gains tax, increasing the administrative burden and compliance costs for the unrepresented taxpayer, even if there is no tax to pay.

Capital Gains Tax - Private Residence Relief

LITRG also argues that:

  • nine months is not a long enough period to sell a property in a sufficient proportion of cases and the government should consider alternative ways to tackle perceived abuse of the present system;
  • the scope of the exception for those disabled or resident in a care home, where a 36-month final exemption period applies, should be extended to include those prevented from living in their home for health reasons;
  • the changes to letting relief should not apply to periods prior to April 2020;
  • the rules will incentivise landlords to sell their properties, with knock-on impacts for tenants in the private rental sector.

Our submission can be found here: Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs – LITRG response

Tom Henderson

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