HMRC has published a consultation, 'Capital Gains Tax: Private Residence Relief: changes to the ancillary reliefs'. This follows the Budget 2018 announcements.
Key proposals for the reform to the CGT Private Residence Relief rules are:
- That the final period CGT exemption will be reduced from 18 months to 9 months.
- The special rules allowing 36 months relief for the disabled and those in a care home will not change.
- Lettings relief will be reformed so that it is only available in cases where the owner remains in ‘shared occupancy’ with the tenant.
Further proposals include changes to
- Extending the benefits of job-related accommodation to apply to service personnel in cases where they live in accommodation not technically provided by the MOD but, for example, where they may rent in the private rental sector.
- The spouse to spouse transfer rules so that the receiving spouse should always inherit the transferring spouse’s period of ownership and the use to which the property was put during that time.
All changes will come into effect for disposals on or after 6 April 2020.
This consultation seeks views on these changes and runs from 1 April 2019 to 1 June 2019.
Question 1: Do you have any comments about the reduction of the final period exemption?
Question 2: Do you have any other comments about the reform of lettings relief?
Question 3: Do you believe there is a case for legislating to ensure that the benefits of job related accommodation will continue to apply to personnel who organise accommodation through the Future Accommodation Model?
Question 4: Do you have any comments on legislating these ESCs in their present form?
Question 5: Should the receiving spouse always inherit the ownership period and the use to which the property had been put in the past regardless of whether it is a main residence at the time of transfer?