Budget hits landlords with cut to lettings relief

In his budget speech yesterday, Chancellor Philip Hammond announced a further attack on residential property owners by restricting capital gains tax “lettings relief”. We asked David Morrison of EQ Accountants (pictured) to summarise for us what this means to our members.

David explained: “Lettings relief can currently be used to reduce the amount of capital gains tax due when a property is sold, if the property used to be the landlord’s main residence and has subsequently been rented. With effect from April 2020, lettings relief will be restricted to only apply to circumstances where the owner of the property is in shared occupancy with the tenant.  Further, the final period exemption will be reduced from 18 months to 9 months.  Whilst consultation is to take place, previous examples would indicate that these changes will come into force with effect from 6 April 2020.  Those intending to sell properties that they formerly occupied should take advice as to how these changes might affect their taxation position.”

If you have any questions about any of the tax rules relating to residential property, David Morrison invites you to contact him on 01382 312100 or david.morrison@eqaccountants.co.uk or contact your own tax specialist for advice. Members please note that the SAL helpline does not cover the specialist and ever changing area of tax advice.

EQ Accountants will be one of the exhibitors at National Landlord Day taking place in Edinburgh on Tuesday 13 November. David Morrison is also participating in a panel discussion on the day in which various experts will discuss “What’s new in property finance?”. David and his team look forward to helping members with their tax questions at the conference.