Broadly speaking, when an individual disposes of a property that has been their main home at some point, they are liable to Capital Gains Tax ("CGT") only on the gain attributable to the period of ownership when the property did not qualify as their main residence. This gain is, however, reduced by some periods of deemed occupation where the taxpayer is entitled to treat a particular period as a period of occupation regardless of whether it was in reality.
Perhaps the most useful of these is that where a person has at any time lived in the property as their sole or main residence, the gain attributable to the last 36 months of ownership will automatically be exempt from CGT. From April 2014 however, this will be reduced to 18 months.
This reduced relief is perhaps not all that surprising given that HMRC has taken a number of private residence relief cases to court recently and may be looking to tighten up on the availability of this valuable relief.
The window for planning is short but we are happy to speak to individuals affected by this change and consider the options available.
For some, this might mean re-occupying a property for a period prior to sale. For others, it might mean accelerating the sale of the property in question but whatever the scenario we would be happy to discuss and assist you with planning.