In July 2019 it was confirmed the government’s plans to:

  • reduce the final period exemption from 18 months to 9 months (unless special circumstances where 36 months); and
  • restrict the letting relief to cases where the owner is in shared occupancy.

Both of these changes will apply to disposals on or after 6 April 2020 and are retroactive.

As a result many landlords who once occupied a property before renting it will have a gain for an additional 9 months and no longer receive lettings relief which can be up to £40,000 and may therefore need to consider selling any properties before April 2020 where the change in the position will cause a significant increase in taxable gains once the changes come into effect.