Principal private residence relief ― basic principles

By Tolley

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

  • Principal private residence relief ― basic principles
  • Conditions for relief
  • Calculation of the relief
  • Letting relief
  • Effect of lodgers on PPR relief
  • Anti-avoidance

This document discusses the calculation of the relief, including conditions for deemed occupation, non-qualifying tax years, delay in taking up residence, the letting relief rules and the anti-avoidance rules.


Where anindividual sells his only or main residence, generally the gain is exempt from capital gains tax (CGT) due to a relief referred to as the principal private residence (PPR) relief. PPR relief is not a statutory term but it is a phrase commonly used by tax professionals.

PPR relief may exempt all or part of a gain which arises on a property which anindividual has used as his home. This is not a deferral relief; the gain is exempt, it does not come back into charge later.

The capital gain is calculated in the normal way, see the Basic calculation principles of capital gains tax guidance note. PPR relief (and possibly letting relief, see below) is then deducted to arrive at the chargeable gain.

Proceeds of saleX 
Less: costs of sale(X) 
Cost or market value as at 31 March 1982 (MV82) if laterX 
Plus: costs of acquisitionX 
Plus: enhancement expenditureX 

More on Capital gains summary: