Government issues consultation on private residence relief

HMRC has launched a consultation paper that seeks views on proposed changes to private residence relief.

Changes to the rules were first announced during Budget 2018, when the chancellor expressed displeasure at the practice of using PRR, which is designed to protect people from exposure to capital gains tax when selling their homes, for properties not classed as their main residence.

The government announced that from April 2020, lettings relief would be restricted to owners who share an occupancy with the tenant, and that the final period exemption will be reduced from 18 months to 9 months – although there would be exemptions for those with a disability or who are in care.

It has now set the commencement date from 6 April. From then on, only dates where the owner shared the occupancy with the tenant will be applicable for lettings relief.

The government expects the rule change to impact 40,000 people a year and forward an extra £150m to the exchequer by 2024.

The consultation will close on 1 June 2019.


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