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Principal Private Residence Relief

Principle Private Residence (“PPR”) relief is one of the more widely known tax reliefs, providing relief from capital gains tax on the sale of your home.

The level of PPR relief available is calculated by reference to the “period of ownership” and the “period of occupation” on a pro rata basis. With this in mind, where an individual has lived in their home as their main residence throughout their period of ownership, a liability to capital gains tax should not arise.

Complications arise where there are periods where the property was not occupied by the owner (e.g. because you left to work abroad or move in with a partner), or where you are residing in more than one property.

Therefore, where there is any doubt over whether PPR relief will be available in full, expert advice should be taken.

Lettings Relief

Where PPR relief is available on the sale of your home and you have let out the property to tenants, then additional relief may be available under Lettings Relief.

Up to 5 April 2020, Lettings Relief is available (up to a maximum of £40,000) where a property has been let as residential accommodation during a period of absence.

From 6 April 2020 onwards, Lettings Relief will be restricted to situations where the landlord is living in the same property as the tenant in shared occupation.

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