Planning to sell a home

If you are planning to dispose of your former home act quickly or you could lose some of the capital gains tax (CGT) relief available.

A former home which has been let out can qualify for up to £40,000 of lettings relief to cover the gain accrued during periods of letting. However for sales agreed from 6 April 2020 onwards, lettings relief will only apply for periods when the owner was in occupation alongside the tenant. Periods during which the property was fully let will not qualify. This will retrospectively wipe out any accrued lettings relief for periods when a property was fully let.

If you have had to move out of your home sometime before it is sold, perhaps due to divorce,
serious illness or relocation of a job, the period in which the property is not occupied generally does not qualify for the CGT exemption. Currently the last 18 months of ownership is treated as being exempt from CGT but this final exempt period will be reduced to nine months from 6 April 2020.

A transfer of a home between spouses or civil partners allows the recipient to inherit the cost of the property so that no gain arises on the transfer. This will not change, but for transfers made after 5 April 2020 the recipient will inherit the exemptions derived from the use to which the property was put during the period it was owned by the transferor spouse. This could
reduce the main residence relief where a let property is transferred to a spouse and then becomes the couple’s main home.

We can help you calculate the expected gain on the sale of your property and the reliefs which will be available.

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