These plans are to abolish lettings tax relief from April 2020 which would impact on ‘accidental landlords’ who once lived in a property and then decided to let it.
The sale of a former residence which has latterly been let out, may be liable to CGT if it is worth more at sale than when purchased. Until April 2020, up to £340,000 of letting relief may apply and is currently worth up to £311,200 of CGT savings.
After April 2020, this lettings relief is being withdrawn, except to those who occupy the property with a tenant.
This could prompt those landlords affected, who had plans to sell in the next couple of years, to do so before the April 2020 deadline.
Also, at present landlords who sell a rental property and make a capital gain, have until January 31st in the year after the tax year they made the sale, in which to pay their bill. £0So, for example, if an individual made a taxable capital gain from a property sale in May of 2018, they would not have to pay this tax liability until January 31 2020.
From April 2020 a CGT bill on the sale of a residential property by a landlord will have to be settled within 30 days of the completion of the disposal.
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