Budget 2014 and capital gains tax

Private residence relief – final period rule

As announced at Autumn Statement 2013, the government will legislate to reduce the final period exemption from 36 months to 18 months in most cases from 6 April 2014.

The final period exemption applies to a property that has been a person’s private residence at some time, even though they may not be living in the property at the time they dispose of it and they may be claiming private residence relief on another property at the same time. 

Legislation will be introduced in the Finance Bill 2014 to amend Section 223 of the Taxation of Chargeable Gains Act 1992 (TCGA). From 6 April 2014 the final period exemption will be reduced from 36 months to 18 months.

However, for a person moving into care, a 36-month period will remain; this is to recognise that they may take longer to decide to dispose of the former home. 

For further information, visit the 'Related links' section on this page.

Non-residents and UK residential property

From April 2015 a capital gains tax (CGT) charge will be introduced on future gains made by non-residents disposing of UK residential property.

A consultation on how best to introduce this will be published.

Annual exempt amount

For 2014/15 the annual exempt amount will be £11,000 and for 2015/16 and subsequent years it will be £11,100.

The exemption for most trustees will be £5,500 and £5,550 respectively.

Chargeable gains roll-over relief: reinvestment in intangible fixed asset

Legislation will be introduced in the Finance Bill 2014 to amend section 156ZB TCGA 1992 to bring the corporation tax treatment of companies seeking to claim capital gains roll-over relief into line with the rules enacted in the Finance Act 2002. 

The legislation will make it clear that roll-over relief under the chargeable gains rules is not available where the proceeds are reinvested in an intangible fixed asset, effective from 19 March 2014. 

Legislation will also be introduced in the Finance Bill 2014 to enable the tax cost of any intangible fixed asset to be adjusted where roll-over relief has been claimed in respect of a reinvestment in intangible fixed assets before Budget 2014 (19 March 2014).