After the announcement of key changes for landlords of residential rental property, there has been a consultation from HM Revenue & Customs which closed on 1 June 2019.  The main proposals are:

  1. At present landlords of residential rental properties have until the following January after the tax year the sale is completed to declare and pay any Capital Gains Tax (CGT). Therefore, for a sale in May 2019, the CGT would not be payable until 31 January 2021.
    Under new proposals, the CGT liability would need to be settled within 30 days of the completion of the sale.
  2. Where the owner of the rented residential property once lived in the property, then until April 2020 they could claim up to £40,000 of letting relief within the calculation for any Capital Gains Tax.
    From 5 April 2020, the letting relief of £40,000 is being withdrawn and only allowed for any landlords that occupy the property with a tenant–shared occupancy.
  3. As part of the CGT workings on the sale of a rented residential property, the last 18 months is referred to as the final period of exemption and is calculated as ‘deemed occupancy’.
    From 5 April 2020, this will be reduced to 9 months.  

Crowthers offer a range of Tax Planning Services. Please visit our services page for further details.