Where an individual sells a property which has been their main or only residence for part, but not all, of their period of ownership they do not pay UK capital gains tax:
- on gains which accrue in any periods during which they occupied the property as their only or main residence (or are treated as having so occupied); or
- on gains which accrue in the last 36 months of their period of ownership (even if they are living in another property which qualifies for relief as their main residence during those 36 months).
This 36 month period, which is intended to avoid penalising individuals who find it difficult to sell a property they have vacated, is being halved to 18 months from April 2014. This is a reflection of the liquidity in the property market and that any property should sell within 18 months.