Reducing CGT with Principal Private Residence Relief

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.

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Principal Private Residence Relief Is it worth reoccupying a property before sale to reduce CGT? This is a common question that our members have so we've devoted an article to it to explain the tax position. If you have a property that you have occupied as a main residence or you intend to do so in the future, this article tell you what you need to know about reoccupying it before a disposal. . . . keep reading Should you sell or let your former home? In the past when you wanted to buy a new house you simply sold the old one. Now, its not that simple and many people are looking to retain their former house, either for financial reasons or personal reasons. Of key importance will be the potential tax implications. As well as if you should sell the property a related question is when you should sell the property. This article equips you with the information you'll need to make an informed decision. . . . keep reading 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 Selling a main residence before 6 April 2008 to reduce capital gains tax Although the new capital gains tax changes include no direct changes to principal private residence relief, when you sell a main residence there are some indirect effects. This article looks at why leaving a disposal of a former main residence until after 5 April 2008 may result in an increased capital gains tax charge. . . . keep reading Is letting a property worthwhile in reducing capital gains tax? This is a question that is frequently asked so it's well worth putting into a separate article. In this article we look at the two main ways in which letting a property can be effective in reducing capital gains tax on property disposals. . . . keep reading Step by Step guide to completing the form P85 when you leave the UK to establish non UK residence You'll probably be completing a form P85 when you leave the UK to tell the Revenue of your departure. This article goes through in detail how to complete this form and includes step by step instructions including explaining why the Revenue want to know the information they're asking for. It includes screenshots of the actual form to illustrate the points. . . . keep reading 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 Why occupying for only a short period can increase the amount of private residence relief For anyone considering how long to occupy a property for in order to maximise principal private residence it's worthwhile noting that more occupation doesn't necessarily equate to higher relief. This article explains why. . . . keep reading More

Capital gains tax advice

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

Tax Articles on Principal Private Residence Relief