The CIOT has
asked the government to consider delaying proposed changes to the capital
gains tax rules in relation to home sales, to take account of the impact of coronavirus
on the property market. Clause 23 of the Finance Bill will reduce the private
residence relief (PRR) final period exemption from 18 months to nine months. The
CIOT sees a significant possibility that the housing market will remain slow
for some time, with properties taking much longer to sell than the average 4.5
months at the time of the 2019
consultation, leaving some sellers with an unexpected tax liability because
it takes longer than nine months to sell their home.
Although respondents to HMRC’s consultation felt that a nine month
final period exemption was too short, the government responded that ‘for the
majority of individuals, a nine month final period exemption strikes the right
balance between being long enough to provide relief whilst they go through the
process of selling their home, but not so long that they are able to accrue
large amounts of relief on two properties simultaneously, or on homes that are
no longer used as their main residence’.
The CIOT has
asked the government to consider delaying proposed changes to the capital
gains tax rules in relation to home sales, to take account of the impact of coronavirus
on the property market. Clause 23 of the Finance Bill will reduce the private
residence relief (PRR) final period exemption from 18 months to nine months. The
CIOT sees a significant possibility that the housing market will remain slow
for some time, with properties taking much longer to sell than the average 4.5
months at the time of the 2019
consultation, leaving some sellers with an unexpected tax liability because
it takes longer than nine months to sell their home.
Although respondents to HMRC’s consultation felt that a nine month
final period exemption was too short, the government responded that ‘for the
majority of individuals, a nine month final period exemption strikes the right
balance between being long enough to provide relief whilst they go through the
process of selling their home, but not so long that they are able to accrue
large amounts of relief on two properties simultaneously, or on homes that are
no longer used as their main residence’.
