Tax changes coming soon!
Do you own more than one residential property, this could be:
- You are a residential landlord,
- You own a holiday home,
- You work away from home and have a flat in town and a house in the country,
- You wanted to move and are still trying to sell your old home
If any of these apply to you then major changes are afoot from April 2020 if you sell one of your properties.
From 6 April 2020 ALL sales or gifts of UK residential property must be declared by YOU to HMRC within 30 days of the completion date and the tax paid over. You may defer the tax payment to the normal 31 January deadline only if you already file a self-assessment tax return. You must however still make the online declaration within 30 days.
The only property you don’t have to make a return for is your own main residence provided it is FULLY exempt. If you’ve ever owned and lived in more than one property at the same time, maybe you were renovating a new property and living between the two, then your properties may not be fully exempt. The same applies if you were trying to sell your old house but it took longer than expected.
For many years people who’ve been trying to sell their old home after they purchased their new one have had the benefit of some additional tax relief. The first was the final 18 months counted as deemed main residence which usually provided enough time to find a buyer; this is now reduced to 9 months.
The second relief was available to those who for whatever reason decided to keep their old home and rent it out. The capital gain on eventual disposal was split into the period they lived in the property and the period it was let, with only the latter being taxed. In addition they could claim up to £40,000 lettings relief. For most people this tax relief is abolished from April 2020.
Come and talk to us if you think this might affect you.