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Property lettings relief

Proposal to withdraw relief for CGT

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So does anyone know if the property lettings relief for CGT has actually been withdrawn?  I cannot find a definitive answer and have a client who desperately wishes to know, as he has just accepted an offer on his let property.

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By The Dullard
12th Mar 2020 10:50

What makes you think the change* has been withdrawn? It was in the last draft Finance Bill, and there's no reason to think it won't still be there when the Finance Bill gets published in just over a week's time.

*The change, by the way, is not the removal of lettings relief, but a limitation on the circumstances in which it applies.

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Replying to The Dullard:
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By davidbarry
12th Mar 2020 12:16

thank you for your reply. My own thinking exactly. However, what is your view on the £15K cost that the husband and wife incurred for the forthcoming rental contracts. Can the £15K cost in anyway be offset against the rental income?

Also, I feel an urge already to obtain authority from the clients and contact the solicitors with a view to them now rescinding their completion statement and issuing two new ones. I understand that this is far fetched and so since this a large law firm what about if I askied them to implement their complaints procedure. My issue here is in your opinion how would this help my clients?

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Replying to davidbarry:
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By The Dullard
12th Mar 2020 12:35

Hello David. I'm sorry, but you appear to be speaking a language that I don't understand.

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Replying to The Dullard:
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By fawltybasil2575
12th Mar 2020 12:49

@ The Dullard.

David has inadvertently posted on THIS thread by mistake - it is on this other thread also :)

https://www.accountingweb.co.uk/any-answers/house-of-multiple-occupation-0

Basil.

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JCACE
By jcace
12th Mar 2020 11:04

The change is effective from 6 April 2020

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By Homeworker
12th Mar 2020 11:08

I have told the client I expect it to go through but nothing is set in stone yet, is it and clients like certainty.
I am aware that not everyone will lose it but have had very few clients who have actually lived in their properties while letting them out.

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Replying to Homeworker:
By ireallyshouldknowthisbut
12th Mar 2020 11:49

You told your client incorrectly then.

Its happened.

If you are in practice you need to read all the draft changes to the finance act, and the final one when its published, or not offer advisory services. There are no half measures.

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Replying to ireallyshouldknowthisbut:
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By The Dullard
12th Mar 2020 12:34

It has NOT *happened*. BoJo prorogued parliament and it found its way into the long grass. There's just no reason to suspect that it won't be in the forthcomoning Finance Bill.

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Replying to The Dullard:
By ireallyshouldknowthisbut
12th Mar 2020 13:38

Hairsplitter!

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By fawltybasil2575
12th Mar 2020 12:20

@ Homeworker (OP).

Since the chances of the changes not becoming legislation are negligible, the key factor is impressing on your client (in the light of your post at 11.08) the necessity to ensure that the sale contract is on or before 5 April 2020 (and, to that end therefore, the necessity for them to impress that fact on their solicitor).

In that respect, I strongly recommend your notifying the client of the estimated ADDITIONAL CGT which would be payable if the sale contract is on or after 6 April 2020; and that the client inform their solicitor of such figure.

You will presumably be aware of two other changes from 6 April 2020, namely:-

(i) the “pay the estimated CGT within 30 days of completion date”; and

(ii) the “reduction from 18 months to 9 months” factor (which will probably be relevant).

My above comments are of course based on the further assumption that the terms of your engagement with your client include your providing advice on the CGT aspects of the proposed sale.

Basil.

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