In his Autumn Statement the Chancellor of the Exchequer made an important and little discussed amendment to the Capital Gains Tax (CGT) Private Residence Relief - Final Period Rule. This will affect anyone who has let out their former home within the three years before selling it. From 6 April 2014 the final period exemption will be reduced from 36 months to 18 months, so if you have a property which was your principal… more
In his Autumn Statement the Chancellor of the Exchequer made an important and little discussed amendment to the Capital Gains Tax (CGT) Private Residence Relief - Final Period Rule. This will affect anyone who has let out their former home within the three years before selling it. From 6 April 2014 the final period exemption will be reduced from 36 months to 18 months, so if you have a property which was your principal residence up to three years ago which is now let, you need to act sooner rather than later or face the possibility of a hefty CGT bill.
As more of us post war baby boomers near retirement we are spending greater time planning equity release and to help fund properties for our children, sometimes aiding them to upsize so grandchildren can have their own bedrooms. My advice is please do not borrow money against equity, as the compound interest charged will far outweigh any Inheritence Tax saving. Once one’s earnings diminish, it is better to sell, use your CGT Private Residence Relief, and downsize into a property on fewer floors, for the knees and lower outgoings for the wallet. Our life expectancy is now significantly greater and no doubt one’s children will also appreciate a leg up onto the property ladder. Remember, we have to survive for seven years after any gift in order to negate Inheritance Tax. As the saying goes - death and taxes are the only two certainties in life.
In January I remarked that the market in the country is always at least a year behind London and was yet to catch up. Having looked at the market activity this year to date I can confirm that it certainly has woken up and taken off, no doubt in part because of the strong December finish in the Capital, and helped by renewed confidence in the economy and anticipated City bonus payments. So if you are thinking of moving to the country my advice is to get your skates on. ’Tis the early bird that catches the worm. If, however, you are thinking of moving to the country, but not until the second half of the year, please make a diary note to visit our Country Homes Exhibition on 23rd May, which will be held at the Sloane Club in Chelsea on the Friday of Chelsea Flower Show. We will be setting out our stand with properties from our country offices as well as those from our network of 13 associated companies across the South of England. Experts from each of these areas will be present to discuss the intricacies and attractions of their local markets as well as individual properties for sale. If you would like more information about the exhibition please call us on 020 7908 1108.
As Easter is late this year, with Good Friday falling on 18th April, I anticipate the Spring market will continue well past the end of the school holidays. As always, we will be delighted to help on your sale and onward purchase.