PROMOTION Higher (and faster!) Future capital gains tax bills for many property owners just around the comer pril 2020 sees some significant Capital Gains Tax (CGT)changes for owners of residential property. owner occupation. Current rules alow A gain arising on a property sale today would be disclosed on a taxpayer's 2019/20 homeowners to treat the final 18 months of ownership as owner occupation even if they weren't living there at the time. From April 2020 (witha few exceptions). tax return with tax payable by 31 January 2021 which is some Il months or soaway. In contrast, a gain ona disposal made after 5 Apeil 2020 will be caught by a new reporting regime with any tax due no later than 30 days of the completion date There are three situations impacted by these imminent changes: 1. Where a property has been used as the owners' home but remains unsold at the this final exemption period will be cut from 18 months to9 months resultingin agreater proportion of any gain being treated as taxable. time they cease their personal occupation - final period of ouwnership change. 2. Where a property has been occupled of that disposal. These changes will represent unwelcome news for a significant number of taxpayers, Note that this change impacts both both as the owners' home and has been those who have let their homes as well let at some stage during the period of ownership. lettings relief change. 3. Where capital gains tax is payable on a disposal of a residential property.. tax payment change. A total of some 40,000 property as those choosing to retain their former home on moving out. LETTINGS RELIEF CHANGE Lettings relief is an additional tax relief available on the sale of a property which, at different times, has been occupied as the owner's home and used as a residential disposals annually are estimated to fall within the first two criteria above and let. Lettings relief can exempt an additional gain of up to 40,000 per owner (L80,000 for a property jointly owned by two people - with a consequent tax saving of up to E22,400). For disposals after 5 April 2020 lettings relief will only be avallable if the letting was such owners should anticipate larger tax liability in the future. In contrast the third change will impact all disposals of residential property which give rise to a tax bill made after 5 April 2020. For advice geared towards your own FINAL PERIOD OF particular circumstances contact: Clive Relf, Tax Partner at Kreston OWNERSHIP CHANGE undertaken whilst the owner lived in the Reeves Private residence relief (PRR) allows a homeowner to generate a tax exempt property at the same time.making the vast T: 0330 124 1399 majority of such owners ineligible from that date. In effect from April this becomes a lodger relief rather than a lettings relief. E: elive.relfekrestonreeves.com capital gain on the sale of their house and it is this relief which keeps most property owners out of the CGT net. Ifyou let your home, however, you should TAX PAYMENT CHANGE KRESTON REEVES Any CGT due on the disposal of a residential property will need, in future, to be paid much sooner than currently. Forexample: expect a CGT bill to arise caleulated by reference to the period of letting (or any void periods) compared to the period of Kreston Reeves has offices in Brighton, Chichester, Gatwick, Horsham, Worthing, London and Kent. www.krestonreeves.com PROMOTION Higher (and faster!) Future capital gains tax bills for many property owners just around the comer pril 2020 sees some significant Capital Gains Tax (CGT)changes for owners of residential property. owner occupation. Current rules alow A gain arising on a property sale today would be disclosed on a taxpayer's 2019/20 homeowners to treat the final 18 months of ownership as owner occupation even if they weren't living there at the time. From April 2020 (witha few exceptions). tax return with tax payable by 31 January 2021 which is some Il months or soaway. In contrast, a gain ona disposal made after 5 Apeil 2020 will be caught by a new reporting regime with any tax due no later than 30 days of the completion date There are three situations impacted by these imminent changes: 1. Where a property has been used as the owners' home but remains unsold at the this final exemption period will be cut from 18 months to9 months resultingin agreater proportion of any gain being treated as taxable. time they cease their personal occupation - final period of ouwnership change. 2. Where a property has been occupled of that disposal. These changes will represent unwelcome news for a significant number of taxpayers, Note that this change impacts both both as the owners' home and has been those who have let their homes as well let at some stage during the period of ownership. lettings relief change. 3. Where capital gains tax is payable on a disposal of a residential property.. tax payment change. A total of some 40,000 property as those choosing to retain their former home on moving out. LETTINGS RELIEF CHANGE Lettings relief is an additional tax relief available on the sale of a property which, at different times, has been occupied as the owner's home and used as a residential disposals annually are estimated to fall within the first two criteria above and let. Lettings relief can exempt an additional gain of up to 40,000 per owner (L80,000 for a property jointly owned by two people - with a consequent tax saving of up to E22,400). For disposals after 5 April 2020 lettings relief will only be avallable if the letting was such owners should anticipate larger tax liability in the future. In contrast the third change will impact all disposals of residential property which give rise to a tax bill made after 5 April 2020. For advice geared towards your own FINAL PERIOD OF particular circumstances contact: Clive Relf, Tax Partner at Kreston OWNERSHIP CHANGE undertaken whilst the owner lived in the Reeves Private residence relief (PRR) allows a homeowner to generate a tax exempt property at the same time.making the vast T: 0330 124 1399 majority of such owners ineligible from that date. In effect from April this becomes a lodger relief rather than a lettings relief. E: elive.relfekrestonreeves.com capital gain on the sale of their house and it is this relief which keeps most property owners out of the CGT net. Ifyou let your home, however, you should TAX PAYMENT CHANGE KRESTON REEVES Any CGT due on the disposal of a residential property will need, in future, to be paid much sooner than currently. Forexample: expect a CGT bill to arise caleulated by reference to the period of letting (or any void periods) compared to the period of Kreston Reeves has offices in Brighton, Chichester, Gatwick, Horsham, Worthing, London and Kent. www.krestonreeves.com