Thousands of property owners in the UK who have fallen into becoming landlords, through inheritance or moving in with a partner, for example, face additional capital gains tax from April 2020.
Chancelor Philip Hammond announced the change in his autumn budget statement earlier this week, imposing major restrictions to valuable tax reliefs and adding unnecessarily complications when disposing of assets.
At present, people who rent out a property that was previously their main residence are eligible for lettings relief, meaning they can claim up to £40,000 in relief when the property is sold, covering the period when it was rented out, saving as much as £11,200 in tax.
The change, however, means that from April 2020, only those cases where the owner rents out a room to a tenant while remaining in the property themselves will receive the tax break. This significantly reduces the number of people eligible for the relief, and is seen as yet another blow to landlords, following mortgage interest tax relief being cut, and an additional stamp duty surcharge of 3% when purchasing additional properties.
To understand the potential implications on your property assets, get in touch with one of our experts.