The Government has published a consultation that was first announced by the Chancellor at the Autumn Budget in 2018 on changes to principal private residence reliefs.
HM Revenue & Customs (HMRC) proposes to decrease the final period exemption for principle private residence relief (PPR) for capital gains tax (CGT) from 18 months to nine months. At the same time, it proposes that letting relief should be limited to circumstances where the owner lives in the property with the tenant.
It is proposed that these changes will apply from the start of the next tax year on 6 April 2020.
Priti Shah, Partner at OGR Stock Denton LLP, said: “This could affect you if you own your main residence in your sole name but occupy it with your spouse.
“If you wish to transfer the property into the joint names with your spouse before letting it out, it is advisable to transfer your main residence into joint ownership whilst it is still your main residence and before letting it out to ensure that both you and your spouse can benefit from PPR and lettings relief.