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Private Residence Relief







home | Private Residence Relief

Principal Private Residence Relief

Reducing CGT with Principal Private Residence Relief

Tax planning for the family home

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
How to establish a property as a main residence in 2014/2015How to establish a property as a main residence in 2014/2015
19/12/2014
In this article we take a look at a fairly recent decision of the tax tribunal that dealt whether a property was occupied as a main residence. We look at the decision making process and key issues ide . . . keep reading

How the new CGT rules for non-residents changes PPR relief for everyone from April 2015How the new CGT rules for non-residents changes PPR relief for everyone from April 2015
10/12/2014
The new CGT rules for non-residents from April 2015 represent a significant change to the tax position of non-residents. However, the rules also impact on UK residents insofar as they are looking to c . . . keep reading

Capital gains tax on a barn conversion including maximising PPR relief - USERNAME: SDS67 - 21/11/2014

Tax Question: I bought my house in June 1999. It is a large house and includes a barn for which I have obtained planning permission to convert it to a 2 bedroom detached house. My house has 7 acre . . . keep reading

Deemed period of occupation for PPR relief if employed overseas - USERNAME: PROBERT1 - 13/10/2014
Tax Question: Whilst non UK tax resident we bought an apartment in the UK in December 2000. We lived in it for about a month in 2001, total time in UK in that year. I then took up another overseas . . . keep reading

Follow-up on property business tax - USERNAME:dnjones - 25/09/2014
Tax Question: Following on from your reply to my previous property business question, can you clarify for me a point regarding the new HMRC provisions on second homes, starting from tax year 2015/16 . . . keep reading

CGT relief on a disposal where a property was transferred between spouses - USERNAME:ZM - 03/09/2014
Tax Question: Dear sir I have last year Transferred our jointly owned property to my wife for the purposes of releasing equity. We both lived in that property for 6 years and it's been let since la . . . keep reading

Tax implications of letting family live in your propertyTax implications of letting family live in your property
01/09/2014
Lots of people let family or close friends live in their property for a period. This article looks at some of the tax implications as well as tax planning opportunities that could arise in this scenar . . . keep reading

Claiming Principal Private Residence relief if you convert a house into flatsClaiming Principal Private Residence relief if you convert a house into flats
29/08/2014
Anyone converting a house into flats should be concerned with any capital gain on a future disposal of the flats. If you have previously occupied the house or are planning to occupy the flats claiming . . . 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

How to establish a property as a main residence in 2014/2015
19/12/2014
How to establish a property as a main residence in 2014/2015 In this article we take a look at a fairly recent decision of the tax tribunal that dealt whether a property was occupied as a main residence. We look at the decision making process and key issues identified by the tax tribunal . . . keep reading
How the new CGT rules for non-residents changes PPR relief for everyone from April 2015
10/12/2014
How the new CGT rules for non-residents changes PPR relief for everyone from April 2015 The new CGT rules for non-residents from April 2015 represent a significant change to the tax position of non-residents. However, the rules also impact on UK residents insofar as they are looking to claim Principal Private Residence ('PPR') relief. . . . keep reading
Capital gains tax on a barn conversion including maximising PPR relief - USERNAME: SDS67 - 21/11/2014

Tax Question: I bought my house in June 1999. It is a large house and includes a barn for which I have obtained planning permission to convert it to a 2 bedroom detached house. My house has 7 acres of land. Our plan is to develop the barn and to live in it as our main residence. We also want to split the land and have 2 acres with the new property (barn conversion). We'll then sell our old house and live in the new barn conversion. Alternatively we may rent out our old house if we can't sell. How will our tax liability (capital gains tax?) be calculated if we sell the barn conversion in the future? . . . keep reading

Deemed period of occupation for PPR relief if employed overseas - USERNAME: PROBERT1 - 13/10/2014
Tax Question: Whilst non UK tax resident we bought an apartment in the UK in December 2000. We lived in it for about a month in 2001, total time in UK in that year. I then took up another overseas role, not returning until July 2013. At that stage we stayed in the property for a few days before moving into was to be our 'family home' acquired in June 2013. In March of 2014 we sold the property. Am trying to check what relief I can get on the CGT due for any deemed periods of residence... Any advice please? . . . keep reading
Follow-up on property business tax - USERNAME:dnjones - 25/09/2014
Tax Question: Following on from your reply to my previous property business question, can you clarify for me a point regarding the new HMRC provisions on second homes, starting from tax year 2015/16. To my understanding, the new provisions will de-exempt non-dom/non-res persons from CGT on second homes in the UK, but only for gains accruing after 5th April 2015. Am I correct there? Regarding the properties which were the subject of my previous enquiry, do they count as second homes if they are rented out as a property investment activity? If the answer is "yes" (i.e. not exempt from CGT), then is it possible for me to nominate any one of my properties (even if rented out) as my PPR once resident (as from my return to the UK) then sell free of CGT? Does one actually have to occupy a property to claim it as a PPR? . . . keep reading
CGT relief on a disposal where a property was transferred between spouses - USERNAME:ZM - 03/09/2014
Tax Question: Dear sir I have last year Transferred our jointly owned property to my wife for the purposes of releasing equity. We both lived in that property for 6 years and it's been let since last 4 years. Now We thinking of selling that property as now property is not in my name I am likely to loose the reliefs available. Is their any way from tax point of view which allows me to spilt gain equally between us ? Looking forward to hearing from you. . . . keep reading
Tax implications of letting family live in your property
01/09/2014
Tax implications of letting family live in your property Lots of people let family or close friends live in their property for a period. This article looks at some of the tax implications as well as tax planning opportunities that could arise in this scenario. . . . keep reading
Claiming Principal Private Residence relief if you convert a house into flats
29/08/2014
Claiming Principal Private Residence relief if you convert a house into flats Anyone converting a house into flats should be concerned with any capital gain on a future disposal of the flats. If you have previously occupied the house or are planning to occupy the flats claiming principal private residence relief should be a key consideration. This article looks at this in detail . . . keep reading
Capital gain on house formerly main residence - USERNAME: Anon - 27/08/2014
Tax Question: My wife bought a house in SW London 1994 for 100k. We subsequently met and married. In May 2014, I bought a house in SE London for 1,020k. My wife's house is valued at about 900k, i.e. a "profit" of nearly 800k over 20 years. To avoid CGT, we put the SW London house on the market in June. Noise from a local supermarket refrigeration plant - only evident in hot weather - coincided with our attempts to sell the house. Our estate agent after one "open day" said the house is unsellable until the noise is eliminated. We hope this will happen within a few months but fear it could continue for a year or more - even breaching the 18 months during which the SW London house has NOT been my wife's main residence. If as a result we become liable for CGT, is it levied on the whole 800k profit? Or is the amount payable calculated according to how long since purchase(i.e. 1-1/2 years out of 21-1/2 years ownership) it has NOT been my wife's main residence? . . . keep reading
Foreign property as a main residence? - USERNAME:Miskimmin - 07/08/2014
Tax Question: If i have sold my UK main residence and work in the UK can i claim my main residence cgt relief on an overseas property and what are the conditions . . . keep reading
CGT on development of family home - USERNAME: nigelc - 23/06/2014
Tax Question: I have owned a house and lived in it for 20 years as my principal and only residence [Uk tax resident, UK house, etc]. The local town is expanding and fields all round me have been rezoned as building land. The local council have now also put my house in the town plan as a development site! I am aware that if I sell the house outright now, I will get PPR on the gain. But, because of the unique nature of the place [listed building getting surrounded by tacky bulk development etc] I think I will have to do some development work and split the plot to get the price that I would have got if the planners had not blighted me. Normally developers pay income tax on profits. Can I make an argument that I am entitled to PPR up to a certain date/valuation [maybe when the place was re-zoned by the council] - and then pay developers income tax on any subsequent development profit made by selling garden / chopping big house into flats etc? Or if I become a 'developer', does all my 20 years capital gain get taxed as income? I am aware I can sell the place to a controlled company to put a line in the sand - but this does incur 5% samp duty and may be an unnecessary move. The site is 2 acres and I am aware of the size limit on PPR releif. I would have hoped to have squeezed through on this one as the place was listed and up to re-zoning it would have been impossible to sub-divide even if I had wanted too. . . . keep reading
PPR relief on disposal of stables/farmhouse - USERNAME: jb - 02/05/2014
Tax Question: Client bought a stable and derelict farm house 3 years ago. lived in the converted stable and now wants to move into the renovated farm house and renting the converted stable. Q on disposal of the whole or some part in future years how should the gains be computed? will a valuation now be useful? any other advice? thank you jb . . . keep reading
Overage payment and PPR relief - USERNAME: Casio - 24/04/2014
Tax Question: An individual is selling part of the ground to his main residence to a developer. I appreciate that this would qualify for relief under PPR as the total area is within the area as prescribed by law. The individual will also receive "overage payment" some time in the future. I understand that overage payment would be regarded as capital and subject to CGT. Will the overage payment be exempt due to PPR exmeption? If not - can you suggest any way the tax on the above could be minimised. The developer is can agree to whatever clause in the agreement. . . . keep reading
PPR relief after the April 2014 changes - USERNAME: napkin - 23/04/2014
Tax Question: Dear Sir A couple have moved away from their lifetime home and rented it for about 2 years now. They want to transfer it to their children as a gift and were always counting on the PPR relief knowing that they can do the transfer up to 3 years after they move out and still qualify for the PPR relief. They did't know about the latest changes that reduced the allowance from 36 months to 18 months from 6 April 2014. Does that mean they will now have to pay CGT for any gains in the last 6 months if they were to do the transfer now, or is there any special exception in the case of gifting the property to their children? Thanks. . . . keep reading
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
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