By Andrew Mitchell, Tax Partner, Armstrong Watson Skipton

As many will be aware, the government have increased the tax burden on property landlords through increasing Stamp Duty Land Tax rates on buy to let properties and restricting the amount of loan interest relief available against rental income. 

From 6 April 2020 the government will now further reduce the deemed occupation period allowable under Principal Private Residence relief and remove Lettings Relief. These measures could considerably increase the amount of Capital Gains Tax an individual will pay following the sale of a property which was previously used as their main residence.

Generally any gain realised on selling your home is exempt from Capital Gains Tax. The exemption applies to the period you are living in the property and also the final 18 months of ownership if you move out before you sell. This final period exemption was originally 3 years being introduced during a slump in the property market to assist people struggling to sell their former home after moving on to another. The exemption was reduced from 3 years to 18 months in 2014. However, from 6 April 2020 the final period exemption will reduce to just 9 months.

Perhaps more importantly, a further relief known as Lettings Relief is to be effectively abolished from 6 April 2020 (unless there is shared occupation). This is a valuable relief for people who let out their former main residence which can reduce the gain on sale by up to £40,000 for each owner.

The withdrawal and restriction of these reliefs could result in individuals paying over £13,000 more in Capital Gains Tax if a property is sold after 5 April 2020.

Given the property market is sluggish at the moment these reductions in relief may well bite many sellers.

If you are considering selling your property and are concerned about the tax implications please contact Andrew Mitchell on 01756 620021 or email