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Disposal of Residential Property

Disposal delayed by Covid-19

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A UK resident individual was advised to dispose of the residential property before 6 April 2020, in order to secure Lettings Relief before the changes in legislation came into effect.

Exchange of contracts was all set for the end of March 2020, but due to the lock-down the purchaser was unable to proceed.

Contracts were eventually exchanged after 5 April 2020, and completion will happen next week. However, this delay means the CGT payable will be much higher, as Lettings Relief will not be due and the final period exemption will be reduced to 9 months. In addition, the Gain will now need to be reported, and the CGT paid, within 30 days.

I am aware that HMRC have announced that CGT reports will not be penalised if they are submitted by 31 July 2020, although interest will still be charged on any tax not paid within 30 days.

Is anyone aware of any other announcements regarding a possible relaxation of the rules where ancilliary reliefs are concerned, and where the delay is wholly attributable to Covid-19?

Thanks in advance.

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By Tim Vane
22nd May 2020 16:53

Hope not. The treasury needs all the cash it can get.

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By TaxableBen
26th May 2020 13:44

It's been commented on in other journals that no extension/ relief has been granted. Is the person in question married? If so there certainly was an opportunity to gain 2 PPR periods etc due to a change of the rules from 6 April 2020, though looks like things are too far gone in this case.

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Replying to TaxableBen:
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By creevagh
26th May 2020 16:00

Thanks for your comment.

The individual is not married, so there was never any mileage there.

Other options were considered, such as asking her sister (who owns 50% of the property already but who does not qualify for Lettings Relief) to purchase her share of the property prior to 5 April 2020. Then a buyer came forward at the 11th hour, and all seemed to be sorted.

Then came Covid-19 and lockdown. The purchaser delayed exchange, as she was moving from 250 miles away to be nearer to her family, and could not travel to move into the property.

Regards,

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