There will be changes to the Private Residence Relief from April 2020. There has been a consultation underway for the past year and the draft Finance Bill published recently confirms that the changes will take place.

We have written this article to explain what the Private Residence Relief covers and what to expect next year.

What is Private Residence Relief?

Currently, if you live in your main residence, then you do not need to pay Capital Gains Tax when you sell your property. The changes that are coming in place affect people that have not been living in their main residence for any reason.

Previously if you were not living in your main residence, you were still exempt from paying Capital Gains Tax for 18 months, this is called the final period exemption.  This was to give people time to sell their property once they had moved.

From 6 April 2020, the final period of exemption will be reduced from 18 to 9 months where there the owner has two properties, one unsold and the second, which is now their main residence.

The special rules that give those in or moving into care homes, and people with a disability, 36 months of exemption will not change.

Changes to Letting relief

Currently, if you move out of your main residence and this is rented to tenants then you are eligible for up to £40,000 letting relief.

However, with the new changes, the letting relief will only be available to you if you have a tenant living in the property with you (shared occupancy). This letting relief does not apply to landlords that have never lived in the property and used this as their main residence.

Once the draft legislation is finalised, we will let you know if any other changes may affect you. In the meantime, if you would like any advice on Private residence relief then contact us by calling o1623 490 120 or email This email address is being protected from spambots. You need JavaScript enabled to view it..