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posted on November 12, 2019
You should be aware that if you rent out all or part of your home this may create a Capital Gains Tax (CGT) charge when you sell the property.
Presently, HMRC excludes the last 18 months of your ownership – even if the property is let for this time – when assessing any CGT liability. In a draft of the Finance Bill released last month, HMRC have confirmed that this 18 month period will be reduced to 9 months from April 2020.
The exemption for disabled property owners or those in a care home will continue to be 36 months.
Letting relief is an extra deduction you can make from any CGT payable as a result of letting your home. You can claim the lowest of the following three amounts
Property owners contemplating the disposal of their home – which is or has been let for any period – may be advised to complete their sale before April 2020. In this way they will benefit from the 18 month exemption and the more flexible lettings relief.