Vanina Wittenburg examines Capital Gains Tax relief for principal private residences in the Official Law Journal for the City of Westminster Law Society

Vanina’s article was published in Official Law Journal for the City of Westminster Law Society, February 2019 (page 16), and can be seen here.

Vanina Wittenburg, Associate in our Private Client department, explains that from April 2020, the government will restrict Capital Gains Tax (CGT) reliefs related to principal private residences.

These changes affect two key ancillary reliefs: the final period exemption and lettings relief. Currently, homeowners benefit from an 18-month CGT exemption at the end of ownership and up to £40,000 (£80,000 for couples) in lettings relief if the property was once their main residence.

From April 2020:

• The final exemption period will be reduced from 18 months to nine months (except for disabled individuals or those in care homes, who retain a 36-month exemption).
• Lettings relief will only apply if the owner shares the property with a tenant, significantly narrowing eligibility.

These reforms aim to ensure relief is focused on those who have lived in their property throughout ownership. However, they may negatively impact individuals struggling to sell, those relocating, separated couples, and some landlords. The government plans to consult on these changes, and affected individuals are advised to seek professional advice.

Read the full article in the Official Law Journal for the City of Westminster Law Society, page 16 [external link].