Current Rules

Under current Capital Gains Tax rules, where a person owns one or more properties that have been their main residence at some point during ownership, they are entitled to relief on the final period of ownership. The final period of ownership which is currently exempt from CGT is 36 months.

The Change

From 6 April 2014, the final period of ownership which is treated as exempt will be reduced to 18 months.

 

The Effect

This measure will affect properties where contracts are exchanged on or after 6 April 2014. This will indeed have a financial impact on many people; creating extra tax costs in a lot of cases and cause more tax problems for separating couples.

It is believed in future that this period will eventually reduce down to just 12 months.

 

You might also like to read our post on RTI.

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