Residential property changes that UK homeowners and landlords need to know about

With effect from April 2019, there will be changes to tax within the property sector, which could potentially impact you as a homeowner or landlord.

The government wishes to implement these changes as they believe it is right that tax is paid sooner in regard to gains from residential property to reduce error and increase compliance. We have put together the key information that you need to know going into 2019.

Capital Gains Tax for non-UK residents

Up until the recent announcement, disposals of residential properties by residents not currently citizens of the UK, didn’t need reporting with any capital gains tax due to HMRC. This has now changed and from 6th April 2019, must be reported on a non-resident Capital Gains Tax return and must be paid within 30 days from completion of the disposal. Regardless of whether there is any capital gains tax to pay, from next April, the information must be completed and reported for full transparency.

Capital Gains Tax for UK residents

From 6th April 2020, this new process will be extended to include UK residents disposing of UK residential properties. So, it’s vital for homeowners and landlords to be retaining information in relation to the historical costs of their properties, capital enhancements and dates of occupation well in advance of the sale of their property.

Principal Private Residence and lettings relief

Further changes for lettings relief and Principal Private Residence relief will also come into effect from 6th April 2020. Lettings relief will only be applicable to you if you share the occupation of the property with the tenant, and the capital gains tax exemption for selling properties – which you previously occupied for the final period of ownership – has been reduced from 18 months to 9 months.

However, the final period of 36 months will remain for those who move into care and disabled persons.

If you are a residential property owner or landlord living overseas or in the UK, and would like further information on the upcoming tax changes, please get in touch with LWA. For our award-winning tax support and friendly expert advice, please contact our Manchester team on 0161 905 1801 or our Warrington teamon 01925 830 830.