Principal private residence (PPR) relief ― overview

Produced by Tolley

The following Personal Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Principal private residence (PPR) relief ― overview
  • Summary of guidance notes about PPR relief
  • How is PPR relief given?
  • An overview example
  • Further reading on PPR relief

Principal private residence (PPR) relief ― overview

The UK has, broadly speaking, experienced an almost continual uprise in house prices over recent decades. Declines in the housing market are often seen as temporary ‘blips’ against a backdrop of an ongoing housing shortage. Relief is provided against the gain arising on the disposal of person’s home through a full or partial exemption. This is commonly known as principal private residence (PPR) relief. Other terms used for this relief include private residence relief and only or main residence relief.

What qualifies as a ‘home’ depends on both the property’s description and how it has been used over time. Where there are changes in the use of a property, the exemption from capital gains tax (CGT) may be restricted.

The amount of PPR relief is therefore dependant on a calculation that involves a number of elements which rely upon the information provided by the taxpayer. Often, the quality of the information provided can be less than ideal especially in cases where the taxpayer is having to recall detail about the use of the property over a number of years. It is therefore essential that a timeline is agreed with the taxpayer. HMRC may seek evidence to support the PPR exemption.

Summary of guidance notes about PPR relief

Topic summaryGuidance note
PPR relief attributable to a gain on the disposal of a dwelling house has, at any time in the period of ownership, been the taxpayer’s only or main residence.
Certain periods of absence are treated as deemed periods of occupation in the dwelling house. These can be summarised as:
– final period of ownership (nine months for disposals on or after 6 April 2020)
– a period of up to two years if there is a delay in taking up occupation
– any period when employed abroad
– up to four years when working away from home (this includes self-employment)
– up to three years for any

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