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The association wants the 36-month period to remain for people who own only one house at a time. Under new regulations introduced following this year’s Budget, the current tax treatment for Capital Gains Tax (CGT) relief of the final 36-month period of ownership will only be available on disposals after 6 April 2014 if the taxpayer is disabled or in a care home say Harris & Co accountants Northampton.

ATT argues that, while intended to reduce opportunity for those with more than one property to exploit the rules, such a narrow category of exempted individuals could mean that those who are not wealthy and have never owned more than one home at a time will lose out.

This could include someone who relocates in order to take up a new job, who might move initially to rental accommodation. They may retain their former residence as the only house they own and only be able to find a buyer for their house and complete a sale more than 18 months after they made their initial move.

ATT also cites the example of someone who temporarily moves in with relatives due to illness, rather than into residential care, and could well find themselves affected by the reduction in the final period of ownership if, at a later date, it turned out that they could not return to live by themselves, as intended, and instead had to sell their property.

Natalie Miller, ATT President, said: ‘When this proposal was debated in Parliament, the government referred to the deemed absence rules that cover periods when someone is away from home. However, those rules require a period of actual occupation of the property both before and after the absence, so they will not apply. The government suggested that one solution would be to let the property but that is hardly likely to increase the chance of finding a buyer.’

Miller pointed out that even though any gain arising in the period outside the relief might be covered by the taxpayer’s annual CGT exempt amount, there would be increased bureaucracy in requiring taxpayers to register for self-assessment in order to report those gains, as in most cases the sale proceeds will exceed the reporting requirement of four times the annual exempt amount.

‘The association is calling for an extension from 18 months to the original 36 months final period for anyone who only had an ownership interest in a single house at any one time. It makes sense that these individuals enjoy the full relief rather than be handicapped by a broad-brush approach to curbing the exploitative activities of a minority,’ Miller said.

ATT said it was disappointed that its recommendations have not been taken on board so far and called on HMRC to monitor who is being caught by this measure to ensure that the outcome meets the original policy objective.

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