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home | Private Residence Relief

Principal Private Residence Relief

Reducing CGT with Principal Private Residence Relief

how to avoid CGT in 2013/2014

If you're looking to reduce your capital gains tax charge on the disposal of UK or overseas property, claiming principal private residence ('PPR') relief can significantly reduce your tax bill.

The rules applying to PPR relief aren't straightforward but we have a number of books and articles that will clearly explain when you can and can't claim this relief. A common area of confusion arises in the application of the principal private residence relief election. Many people think this applies when you own two properties and allows you to avoid choose which property will attract PPR relief.

This is not strictly the case. In order to qualify for the election a property needs to be your residence - not simply a property that you own. 'Residence' implies that there must be some degree of occupation by you. Therefore a property that was let, and never occupied by you couldn't qualify as a residence for this purpose. There are though other options that could be considered.

Interactive PPR Relief Tool
PPR Relief CalculatorPPR Relief Calculator
Calculating the amount of PPR relief can be difficult. This calculator does all the work for you. Just enter details of your periods of ownership and occupation of the property and our PPR relief calc . . . keep reading

Interactive Private Residence Relief ToolInteractive Private Residence Relief Tool
Qualifying for Principal Private Residence ("PPR") Relief can substantially reduce capital gains tax on the disposal of property or land. This interactive tool guides you through the rules r . . . keep reading


Sign up today to read unique tax reports and obtain online guidance on using principal private residence relief to reduce your tax bill

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Principal Private Residence Relief
PPR and SDLT on transfer of property - USERNAME:Matrix - 16/04/2014
Tax Question: Thanks for reply. Considering answer to point 4), if one of the sons wanted to move out then: - could he transfer (or gift) his half share of the house to his brother without any implic . . . keep reading

PPR relief on property to be developed - USERNAME: nigel - 11/04/2014
Tax Question: For 20 years I have owned a large 8 bed listed country manor house in 2 acres. It was my primary residence until I moved out 2 years ago. I have been trying to sell the house [it . . . keep reading

Self build PRR tax advice - USERNAME: Matt C - 24/03/2014
Tax Question: I have a house which I am going to knock down, to split my plot in 2 and build on both plots. One house I intend to sell, the other to live in. What is the most tax efficient way for m . . . keep reading

FREE DOWNLOAD - Tax Planning For The Family HomeFREE DOWNLOAD - Tax Planning For The Family Home
12/03/2014
For many people the family home is the most valuable asset they have. As such protecting its value will be key importance. In this tax guide we look at the key tax planning opportunities for the fam . . . keep reading

PPR relief and making an election? - USERNAME: pekoz1 - 10/03/2014
Tax Question: Hi, A question regarding CGT PPR and is it necessary to make an election... I own a house that used to be my main residence that has been rented out for approximately the last 5 years . . . keep reading

CGT when selling part of garden - USERNAME: cazmancity - 25/02/2014
Tax Question: We are going to sell our house and we are considering selling the garden at the side of us as a building plot. The entire garden [including that at the side]is less than half an acre wi . . . keep reading

Follow up - CGT for bare trustees on property disposal - USERNAME: member74 - 12/02/2014
Tax Question: Dear Sir, Thank you very much for your response. To clarify, the property in trust is owned by all three of us. Bearing in mind the above, my earlier questions [q5 - q9] arise from t . . . keep reading

Tax treatment of property held on bare trust - USERNAME: member74 - 12/02/2014
Tax Question: Dear Sir/Madam Can you assist please 1] This question is about a property held in trust by My Mother, my sister and myself. 2] This Trust was set up following the passing of my Fathe . . . keep reading

Capital gains tax help

We can provide you with help on the application of the principal private residence relief rules via our online Capital gains tax help service.

Tax Articles on Principal Private Residence Relief

PPR and SDLT on transfer of property - USERNAME:Matrix - 16/04/2014
Tax Question: Thanks for reply. Considering answer to point 4), if one of the sons wanted to move out then: - could he transfer (or gift) his half share of the house to his brother without any implications? - or if he sells his share to brother then would his brother need to pay SDLT on the half share? If so what resale value would be assumed seeing as it will not be sold to a third party and no valuation will be done? TIA. . . . keep reading
PPR relief on property to be developed - USERNAME: nigel - 11/04/2014
Tax Question: For 20 years I have owned a large 8 bed listed country manor house in 2 acres. It was my primary residence until I moved out 2 years ago. I have been trying to sell the house [it is currently rented] - but struggled as the area is being developed all around from countryside to dense town and I have been blighted. I believe I can now get planning permission to split house into 4 and put 10 smaller houses in garden. If I develop myself, am I taxed as a developer [with income tax on all property gain?] or can I continue to get primary property relief on up to the capital gain to the point where i started development - this is an issue as I am sitting on 20 years of capital growth. Would I be better to transfer into a limited company for a loan note at a market rate before development [and do I then have to pay SDLT]? I have struggled to find another developer willing to take on both a conversion of a listed building and new construction - if I sold to two developers [as two transactions, one for the garden for newbuild and one for the house to convert] , would I have any problems with primary property relief? My intention on buying 20 years ago was to use as a house for my family - which i did for 18 years. I would still live there if there had been no development in the area. Thanks . . . keep reading
Self build PRR tax advice - USERNAME: Matt C - 24/03/2014
Tax Question: I have a house which I am going to knock down, to split my plot in 2 and build on both plots. One house I intend to sell, the other to live in. What is the most tax efficient way for me to do this? I had planned to set up a SPV for the house I'm selling, and to transfer the land to the SPV and pay capital gains on the land. Then pay tax at 20% o the remaining profit after all build costs. On my main residence I'm being led to believe it's not as straightforward as PRR applying on my existing house and my PRR transferring across. . . . keep reading
FREE DOWNLOAD - Tax Planning For The Family Home
12/03/2014
FREE DOWNLOAD - Tax Planning For The Family Home For many people the family home is the most valuable asset they have. As such protecting its value will be key importance. In this tax guide we look at the key tax planning opportunities for the family home and private residences. . . . keep reading
PPR relief and making an election? - USERNAME: pekoz1 - 10/03/2014
Tax Question: Hi, A question regarding CGT PPR and is it necessary to make an election... I own a house that used to be my main residence that has been rented out for approximately the last 5 years, and will be for the forseeable future. After vacating that property I moved in with my girlfriend in a house in her sole name. In June 2011 I bought a run down property in my sole name, moving in April 2013 after carrying some works. Although I still spend some nights at my girlfriends place. Regarding PPR even though the 1st property is no longer my residence [as its rented out] is it necessary for me to make an election? As technically I suppose I only have the 1 residence. Or is proving I do occupy it enough in case of a future sale? Thanks . . . keep reading
CGT when selling part of garden - USERNAME: cazmancity - 25/02/2014
Tax Question: We are going to sell our house and we are considering selling the garden at the side of us as a building plot. The entire garden [including that at the side]is less than half an acre will we have to pay CGT on the side garden land? . . . keep reading
Follow up - CGT for bare trustees on property disposal - USERNAME: member74 - 12/02/2014
Tax Question: Dear Sir, Thank you very much for your response. To clarify, the property in trust is owned by all three of us. Bearing in mind the above, my earlier questions [q5 - q9] arise from the my Mother's proposed sale the original property in trust in order to purchase another property nearer to us.  The new property will be purchased from the proceeds of this sale. In short, the new property would simply replace the original property in trust with no other change to circumstances. How would this effect question 5, 6, 7, 8 and 9 Thank you again . . . keep reading
Tax treatment of property held on bare trust - USERNAME: member74 - 12/02/2014
Tax Question: Dear Sir/Madam Can you assist please 1] This question is about a property held in trust by My Mother, my sister and myself. 2] This Trust was set up following the passing of my Father some years ago.  It is a bare trust containing just one property ie: my Mother's current residence. 3] At this time, my Mother wishes to move to a new home 4] Although we are selling the house held by this trust and in this case making a capital Gain, any gain will be offset by the need to acquire a new home for my mother. 5] Therefore, on a "sale and purchase" would we be able to say that in effect the trust remained unchanged and that no Capital Gains is due at this time? 6] If there is a balance of monies left after the sale that is not required to buy the new property, can/should that money be left in trust? and if so would that be exempt from Capital Gains for the time being. 7] If, in addition to the sale price of the original house, more money is needed to buy a place for my Mother, then can the Trust be given a loan to be repaid at a later date.  Is this advisable? 8] Are trustees [more specifically my sister and me]  allowed to apply an annual tax free allowance to the property in the trust in order to reduce future Capital Gains tax liability? 9] I have been told, that if I have ever lived in the property for more than 6 months, I would be exempt [or part exempt] from CGT on any sale.  Clearly the current house was my home from childhood for many years.  Am I able to use this fact to reduce or eliminate CGT. Thank you very much for your time Brian . . . keep reading
How to claim PPR relief on property occupied by a relative
How to claim PPR relief on property occupied by a relative Where you have a property owned by you but occupied by an elderly relative it used to be possible to claim dependent relative relief. This is now long gone, but what other options are there for structuring an occupation of your property by an elderly relative so that you can reduce PPR on a future disposal? We look at one opportunity in this Practitioner Zone article . . . keep reading
Beneficial ownership and CGT - USERNAME: lucas0987 - 03/02/2014
Tax Question: I live in Qatar and own a buy-to-let property with my sister in the UK. However, the property is legally in the sole name of my sister that lives in the UK. We are considering transferring the sole ownership to me in Qatar. I have no UK assets or income. What are the CGT implications for both of us? . . . keep reading
Which is the best way for non doms to hold UK property?
29/01/2014
Which is the best way for non doms to hold UK property? It's often asked which is the best way for non doms to hold UK property. In this article we look at the key tax issues and whether it is beneficial to hold personally, use an offshore trust or an offshore company . . . keep reading
PPR relief on separation - USERNAME: Sam1 - 27/01/2014
Tax Question: Couple bought property 1 jointly in 2006 and property 2 jointly in 2007 and shortly afterwards made an election that property 1 be treated as their main residence [they spent time in both]. In June 2011, the couple separated and the husband then lived in property 1, the wife in property 2. Property 2 will be transferred wholly into wife's name [at no gain/no loss presumably] once divorce is finalised [later in 2014]. Until then, both properties continue to be jointly owned. Question : can wife elect that property 2 is her main residence giving her PPR relief on disposal in the future? If so, what are relevant time limits? Legislation seems to say that the election must be given within two years from the date on which the individual has a particular combination of residences [2007 in this case]. But does the situation change because of the separation? Or can husband/wife only elect to have 2 PPRs [i.e. one each] following divorce [as opposed to separation]. . . . keep reading
Private lettings relief and Entrepreneurs relief on disposal of guest house - USERNAME: 1pjgs2 - 27/01/2014
Tax Question: Fully furnished UK guest house B&B on disposal. Thank you very much for your answers. Sorry, I was not clear on my third question [copied below]. My meaning was that the ltd company would take the role of running and managing the guest house in 2/3 of the house. Would PLR, CG annual allowance and entrepreneurs relief still be eligible? 3. If the whole house was privately owned and a ltd company shares wholly owned and managed by same house owner 'traded' in 2/3 of the guest house, and: -the house and business were sold at the same time -no rent received by the property owners from the ltd co. -owned/traded period of more than one year. Would the above set-up still be eligible for annual allowance, PLR and entrepreneurs relief as an 'associated disposal ? . . . keep reading
Disposal of flat and declaring capital gain - USERNAME: wealth - 27/01/2014
Tax Question: Myself and my friend bought a freehold house consisting of two flats, in joint name. We created a trust deed memorandum that the ground floor belongs to me and the top floor belongs to my friend. My friend has now sold the top floor on a 99 year lease.He gets ground rent of £50 pa 1. Does he need to declare the sale of his flat even though it was his ppr? 2. He wants to transfer or gift the freehold to me, so whole freehold title is in my name. a] what procedure is necessary for tax and land registry b] HMRC form i7 is only for spouce transfers, so is there any other way of notifying HMRC of the transfer. c] it is necessary to notify HMRC? . . . keep reading
Fully furnished UK guest house [B&B] on disposal - USERNAME: 1pjgs2 - 22/01/2014
Tax Question: Fully furnished UK guest house [B&B] on disposal. House split 1/3 private use 2/3 guest use for entire duration. CGT on disposal: 1. Would 1/3 be eligible for PPR? 2. Would 2/3 be eligible for CG annual exemption, PLR & entrepreneurs relief? 3. If the whole house was privately owned and a ltd company [shares wholly owned and managed by same house owner] 'traded' in 2/3 of the guest house, and: -the house and business were sold at the same time -no rent received by the property owners from the ltd co. -owned/traded period of more than one year. Would the above set-up still be eligible for annual allowance, PLR and entrepreneurs relief [as an 'associated disposal]? . . . keep reading
Sale of garden plot with planning permission & reducing CGT - USERNAME: Kathryn1 - 09/01/2014
Tax Question: CGT Hi I have gained planning permission within the garden plot of my house that is my principle private residence to build a end of terrace house. I have registered the plot with the land registry and gained a separate title in both my wifes & my name. The plot is 0.045 acres. I have identified the following options, can you advise if I can avoid CGT or reduce it . Option 1 Sell the plot only & keep the house Option 2 Sell the plot & house together Option 3 Have the Land registry return the title back to a single entry as it was before & sell the whole plot with planning permission to build a property. . . . keep reading
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