Finance Bill 2019-20: Changes to CGT PRR

Released 11 July 2019

HMRC have published a policy paper, along with draft legislation and an explanatory note, confirming changes to capital gains tax (CGT) private residence relief (PRR), which are expected to take effect from April 2020.

Broadly, the final period exemption will be reduced from 18 months to 9 months (there are no changes to the 36 months that are available to disabled persons or those in a care home) and lettings relief is being reformed, so that it will only apply in those circumstances where the owner of the property is in shared-occupancy with a tenant.

The proposals also:

make some revisions to job related accommodation relief by extending it to those cases where a homeowner who is a serving member of the armed forces is in receipt of payments from the Ministry of Defence (MOD) under its Future Accommodation Model;

legislate two extra statutory concessions (ESC); and

clarify the rules concerning the transfer of residential properties between spouses or civil partners.

A summary of responses to the recent consultation on the changes is also available.

View the policy paper: Changes to ancillary reliefs in Capital Gains Tax Private Residence Relief.

View the summary of responses: Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs -Summary of Responses.

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