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From 6th April 2020 a number of changes came in which could impact anyone selling residential property.
Where a residential property is disposed of after 5 April 2020 and a chargeable gain arises, within 30 days of the sale completing, the seller will be required to;
This legislation has already been enacted within the Finance Act 2019.
From 6 April 2020, the final period of exemption for Private Residence Relief has been reduced to 9 months from the previous 18 months. In addition Lettings Relief is restricted and only available to those that lived in the property at the same time as the tenant.
These changes could have costly implications and so clients thinking of selling residential property that may be caught by the changes may wish to take advice.
If you are not already, please let your clients know about the changes.
If you do not already you may wish to start encouraging clients with residential property to keep records and evidence of purchase costs, and significant improvements. These could help save significant amounts of tax and time when they come to sell the properties, especially given the tight timeframe to prepare the Tax Return and pay the tax.
Many residential landlords may already be keeping great records. It is worth encouraging the other landlords to start keeping similar great records now. Do you consider recording similar information for individuals living in their own home, just in case one day they start renting it out or there are possible tax consequences?
The changes to residential properties are a huge opportunity for accountants to help existing clients and win new clients, provide new services and increase their bottom line profits.
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