Principal private residence relief ― more than one residence

Produced by Tolley

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

  • Principal private residence relief ― more than one residence
  • What constitutes a residence?
  • Occupation under licence
  • Job-related accommodation
  • Occupation by a dependent relative
  • Nominating a main residence
  • Impact of the non-qualifying tax years rule on existing nominations
  • Interaction with the NRCGT rules
  • What if the deadline for making a nomination is missed?
  • Late nominations

Capital gains tax relief is available for gains on the disposal of a dwelling house which has been the taxpayer’s only or main residence. The mechanics of the relief and the occupation and deemed occupation periods are discussed in the Principal private residence relief ― basic principles guidance note. This guidance note discusses the implications of having more than one residence and the impact on the amount of the principal private residence (PPR) relief claim.

Where a married couple or civil partners are living together, the legislation states that they only have one main residence per couple and any nominations for the main residence must be signed by both parties (see below). Unmarried couples are dealt with as individuals and can each have a separate main residence.

Other joint owners of a residence living together (eg unmarried couples, relatives, friends) are treated as each having an undivided share in the entire property, and therefore full PPR on sale, provided each person has unrestricted access to the whole property. Unrestricted access is not the same as use. For example, occupation of separate bedrooms does not prevent PPR relief being available to all owners on disposal of the property.

What constitutes a residence?

PPR relief is available on the sale of a dwelling house that has been the taxpayer’s only or main residence. Where an individual (or a married couple) has more than one residence he (or they) can nominate the main residence by notifying HMRC (see below).

A residence is more than just owning a property. For example, purchasing a property to rent out does not make it a residence. HMRC considers the ordinary meaning of residence to be “the dwelling in which that person habitually lives: in other words, his or her home”.

HMRC has not provided any guidance about how long a taxpayer must live in a property for it to become their residence. The taxpayer must satisfy HMRC that, for that short period, the property was

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