It’s certainly a time of uncertainty. It is likely there will be a Budget following Brexit or a General Election, whichever happens first.
One of the many areas that we can expect further updates on is the Private Residence Relief (PPR), with the Government proposing two major changes to the PPR from April 2020.
For properties that have been unoccupied throughout the period of ownership, there will be a limit to the deductions available for capital gains tax purposes. The final period exemption will be reduced from 18 months to 9 months (however the period exemption of 36 months will remain in place for disabled persons or individuals resident in a care home);
A reform of lettings relief so that it only applies where the property owner is in shared occupancy with a tenant. There were concerns raised during the consultation (which ended on 5 September) about periods of letting prior to April 2020 (and 'accrued lettings relief'). The government, however, is planning to proceed ahead with its proposal and lettings reliefs will be restricted or curtailed for disposals (ie sales, transfers etc) on or after 6 April 2020, regardless of the dates of letting.
Although the above is draft legislation for inclusion in the next Finance Bill, if you are involved in property investment it is worth bearing in mind that there may be changes introduced to the PPR and plan accordingly.
It may be also bearing in mind the tax changes that may be introduced should a Labour Government be elected.
If you would like advice or assistance on tax matters relating to property investment please contact us.