Homing in on capital gains

Post by Mearns & Company in News

Draft legislation confirms a further tightening of the rules on capital gains tax and your home.

The government has been reforming the tax system to make investment in residential property less attractive. Actions have included increasing stamp duty land tax (mirrored in Scotland and Wales), reducing tax relief for mortgage interest and, from next tax year, creating a 30-day time limit for paying capital gains tax (CGT) on any residential property sale profits.

There will be two further new changes from April next year:

• A reduction in the ‘final period exemption’. This is the period in which no CGT applies to a former main residence, and it will be halved to nine months in most circumstances. a problem if you buy your new home before selling your old one.

• Letting relief, which exempts up to £40,000 of gain from tax, will only be available if the owner remains in shared occupancy with the tenant. So it won’t apply where the owner moves out.

If you are thinking of moving home but retaining your current property, both measures provide food for thought.


If you have any questions or would like advice please use our contact page here.

The value of tax reliefs depends on your individual circumstances. Tax laws can change. The Financial Conduct Authority does not regulate tax advice.

Newsletter Signup

We send out a quarterly newsletter. If you would like to receive a copy please sign up below.

  • This field is for validation purposes and should be left unchanged.

You are now leaving the website of Mearns & Company and we are not responsible for the content of this external website.