A not so sweet home proposal

A not so sweet home proposal

A proposed change announced in the Autumn Statement concerned the available capital gains tax (CGT) exemption on the main home.

For many, the gain arising on a property which has been the individual's private residence throughout their period of ownership is exempt from CGT. There are deemed period of occupation rules which may help to provide an exemption from CGT even if the individual has not lived in the property all the time. This may mean that the individual is accruing principal private residence relief on another property owned at the same time.

One of the deemed occupation rules is known as the final period exemption. This exempts the final period of 36 months of ownership of the property as long as the property has been established as the individual's private residence at some time during the ownership. It applies even though they may not be living in the property at the time of disposal. It is proposed that from 6 April 2014 the final period exemption will be reduced from 36 months to 18 months. There are some limited exceptions to the change so please contact us if you think this may affect you.

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