30 SECOND TAX SPEED READ - CAPITAL GAINS TAX: LETTINGS RELIEF
In the same way that PPR can exempt a portion (or all) of a gain on the sale of a residence, Lettings Relief is another measure which reduces the chargeable gain on a property that was the owner’s main residence at one time but has since been rented out. Lettings Relief can reduce the gain by up to £40,000 (but is capped at the amount of PPR due for the period of ownership).
The Government plans to make Lettings Relief only applicable where the owner is still living in the property and has effectively rented part of the house out on a shared basis.
A consultation is planned, but changes proposed for April 2020.
As with the reduction in PPR relief, the consultation should be monitored closely, and potentially affected clients identified such that they have fair warning of the changes and can consider making disposals before they are disadvantaged.