3 July 2019
Do I sell my let property now?
If Letting Relief applies it is certainly worth having a review of the tax consequences.
Letting Relief applies if you sell a property which has been let, and at some stage you have also lived in the property. In this case, part of your ownership qualifies for Principal Private Residence relief (the main relief which exempts any Capital Gains Tax on the sale of your home).
Letting Relief is capped to the lower of £40,000 each or the same amount of the chargeable gain made on letting your home. For a husband and wife, the £40,000 limit each quite often covers the overall capital gain.
What is changing?
Currently, the relief applies to all let residential property where there has been some qualifying personal residence. However, from 6 April 2020, the relief will only apply if you let just part of your property, while you remain in residence, for example, a spare bedroom being let out.
If you qualify for the Letting Relief now and you will not do so after 6 April 2020, the £40,000 relief for a married couple could cost you £22,400 more in tax.
Therefore, you should take advice now to review the effect on you.
If you wish to discuss this further, please do not hesitate to contact me or your local UHY representative to discuss your options.
Alternatively, visit our property sector page to see how our expertise can help you.
