From 6th April 2020, gains attributable to only the final 9 months during which the property was not the main residence will benefit from the relief. Professional bodies raised concerns about the period not being long enough and cited reasons from regional & market differences to divorce & separation issues. However, the government feels that the change would prevent homeowners who may have bought another house they are claiming PRR on from benefitting from FPE on disposal because they lived in the property in the past.
There is no change to the 36-month period which applies for the disabled and those in a care home.
It will no longer be possible to claim lettings relief on disposals made on or after the 6th April 2020 if a homeowner has moved out of the property. Currently, the relief works by reducing homeowners’ gains by up to £40,000, irrespective of homeowner occupation if the rented property has been the main residence at some point during the period of ownership.
Following the reform, the relief will only be available for those periods where the homeowner occupies or ‘shares’ the property with the tenant. The restriction of lettings relief will mean homeowners will have a higher gain and would pay more CGT on disposal of property.
Two Extra-Statutory concessions; D21 Private residence exemption: late claims in dual residence cases & D49 Private residence relief: Short delay by owner-occupier in taking up residence and the transfer rules between married & civil partners will be legislated.
Property owners should seek advice on the
application of the revisions and consider rearranging their affairs before the
6th April 2020, possibly disposing of the property before the changes are
enacted if they wish to benefit from the reliefs before the reforms are
implemented. Calls were made for the government to communicate these changes
directly to property owners and the professionals assisting them to ensure
awareness of the new rules, making it clear that these are separate to the
changes that will require reporting and payment of CGT within 30 days of
disposal which would also apply from the 6th April 2020. 
Reproduced with permission of Morgan Soar