Property Tax Changes – April 2020
As we see the Brexit process continue, there will no doubt be some changes along the way. From a tax point of view, here are the certainties that we know of to be coming into play from April 2020:
- Currently, the last 18 months of ownership of a residential property are ignored if a home has been let at any time. From April 2020, this will be halved to 9 months.
- If your home has been let at any time, or is let when you sell it, there is a letting relief you can claim that can make a significant impact on any Capital Gains Tax payable. From April 2020, you can only take advantage of this lettings relief if you are in shared occupancy with your tenant.
- From April 2020, all financial costs incurred by UK residents that let residential property, will be disallowed as an expense of their property business. Instead, tax relief on the disallowed finance charges will be restricted to a basic rate (20%) tax credit. This process started on a phased basis on 6 April 2017 and will complete on 5 April 2020.
- After 5 April 2020, UK residents that sell property or land in the UK will need to prepare a formal CGT computation and send this to HMRC within 30 days of the relevant sale. Tax due will then need to be paid in the same period.
If you, or if you know somebody, that requires additional advice regarding property tax, be sure to contact us for a free initial no-obligation meeting on the details on our homepage.