Lettings relief is a valuable relief that may reduce the capital gains tax (CGT) payable on the sale of a property, which was at some point used as the taxpayer’s only or main residence, and which has also been let as residential accommodation.
When can you claim PPR and letting relief?
If you sell a property which is currently not your home, but you lived in it at some point of your ownership, you can claim Principal Private Residence (PPR) relief for the period that you lived in it. This will mean that you won’t have to pay CGT on the period in which you occupied the property.
Is letting relief being abolished?
This means that lettings relief has effectively been abolished (if you are living at the property and sharing it with the tenant, you will likely be entitled to PRR in preference to lettings relief). Lettings relief accrued before the new rules come into force will be lost.
When did letting relief stop?
6 April 2020
The latest attack announced by the Chancellor at the October 2018 Budget was the announcement that Lettings Relief would be removed from 6 April 2020 onwards, as well as the private residence relief that applies for the last 18 months being reduced to 9 months on this same date.
Has lettings relief been abolished?
How do I calculate letting relief?
To work out how much lettings relief you get, you first need to work out how much private residence relief you are entitled to. To do this you take the number of months you actually lived in the property, add 18 and divide by the number of months you owned it and multiply by the gain made.
When did letting relief change?
Changes in relation to Principal Private Residence (PPR) and letting relief were introduced on 6th April 2020. This means that landlords who currently rent out a property they have previously lived in could now face a higher tax bill when they come to sell the property.
When does CGT relief for second home end?
Owners of second homes and buy-to-lets that they have previously lived in should be aware that as from April 2020 the tax relief period allowed against capital against tax (CGT) will be reduced.
When does the exempt period for CGT end?
Currently, if a property has been occupied at any time as an individual’s private residence, the last 18 months of ownership are disregarded for CGT purposes. This relief applies even if the individual was not living in the property when it was sold. From April 2020, this final exempt period will be reduced from 18 months to 9 months.
How long does it take to get CGT on a property?
Currently, if a property has been occupied at any time as an individual’s private residence, the last 18 months of ownership are disregarded for CGT purposes. This relief applies even if the individual was not living in the property when it was sold.
When is lettings relief available for a residential property?
Lettings relief is available where all or part of a property is let for residential use as long as at least part of the property has been used as the taxpayer’s only or main residence for part of the period of ownership.
