It was announced in the Autumn Statement that there will be changes made to the rules for Private Residence Relief.
A gain arising on a property which has been an 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 was not living in the property. This may mean the individual is accruing private residence relief on another property at the same time.
The final period exemption applies to a property that has been an individual’s private residence at some time even though they may not be living in the property at the time of disposal.
The final period exemption will be reduced from 36 months to 18 months with two exceptions. An individual that:
- is a disabled person or
- is a long term resident in a care home, where they have been there for at least three months, or can reasonably be expected to be resident there for three months, and
- has no other property, on which they, or their spouse or civil partner, can claim private residence relief
will continue to be able to claim a 36 month final period exemption.
The rules apply to disposals made on or after 6 April 2014.