If you have residential properties that you rent out you are liable to Capital Gains Tax when you sell them. From 6 April 2020, the rules are changing if you lived in the property at any point of ownership. Read on for more information on what this could mean for you.
Changes to Capital Gains Tax from April 2020
Lettings Relief
When you sell a property that you have lived in at some point, you can claim Lettings Relief. This can give you an additional relief of up to £40,000 per person.
From 6 April 2020 – this relief will be removed UNLESS you share the property with a tenant.
Final Period of Exemption
Currently, when you sell a rental property that you previously lived in you get an exemption for the last 18 months, as well as the months that you lived in it. However, this is changing and now, from April 2020, this relief will be reduced to 9 months, plus the months you lived in it.
N.B This will not affect those who are currently living in or are about to move into, a residential care home, or disabled homeowners. In these cases, the current exemption of 36 months will remain.
Payment of CGT
Instead of paying your capital gains tax on your next UK tax return, all capital gains tax due on the sale will be due within 30 days. If you are a non-resident landlord, this is already the case.
Need more information? You can find out more detail on CGT and Residential property tax via the Gov.uk website here.
If you would like to discuss this in more detail, or for any tax-related issues, you can book a consultation with Wendy through the website https://zebraaccountants.com/expat-tax-consultations/
For more advice, read more of our blog posts here.
Hi, I am Wendy O’Dell Callaway.
I have helped hundreds of Expats with their UK taxes. This is a daunting and complex area for many, so why not let me guide you through the tax minefield that lays ahead of you?