With effect from 6 April 2020, the rules in relation to principal private residence relief will change. These rules provide relief from capital gains tax when an individual sells their only or main residence.

At present, where a property has been the only or main residence for at least part of the period of ownership, the last 18 months will benefit from relief.  This is the case whether or not the property is the owner's only or main residence during that time. 

With effect from 6 April 2020, the period of 18 months is being reduced to 9 months.  The aim of the relief is to allow for circumstances where an individual needs to move out of the property but is not able to sell it immediately.   

The reduction in the period of relief will adversely affect those who have moved out of their homes and are now unable to sell due to the impact of Covid-19.  Current Government guidance is to delay the buying and selling of property where possible, but in doing this, sellers may end up with an increased capital gains tax liability.  

Ideally the implementation of the new 9 month time period would be delayed or scrapped, but at present there is no indication that the Government or HMRC is reviewing this particular issue.