Principal Private Residence Relief, or PPR, is a relief that enables taxpayers to sell their homes without having to pay capital gains tax (CGT). In order to claim the relief the property being sold must be the taxpayer’s main residence.
How do you prove private principal residence?
The following are suggestions: Documentary evidence in particular utility bills in the owners’ name at the property address. Other receipts for home insurance, telephone bills, DVLA records or credit reference agency records should be kept. The property address being on the electoral register in the owners’ name.
Is the sale of a principal private residence taxable?
If they sell the property that was let at a gain then part of the gain will be taxable. However if they sell the property that they lived in this should be exempt from tax as it was always used as a principal private residence. They could then move into the property that was let and continue to use it as their private residence.
How does private residence relief ( PRR ) work?
However, a valuable tax relief called private residence relief (PRR) automatically applies on the sale of one’s main home and this relief may exempt all or part of the gain which arises. How it works. The relief applies to the disposal of a ‘dwelling house’ which is, or has been, the only or main residence of an individual.
Can a let part qualify for private residence relief?
If you’ve more than one lodger, or if you let part or all of your home at any time in your period of ownership, the let parts will not qualify for Private Residence Relief. However, you may be entitled to claim Letting Relief. If part of your dwelling house is used exclusively for a trade or business, that part will not qualify for relief.
How does private residence relief affect capital gains?
Private residence relief from capital gains tax. A gain arising on the disposal of a residential property may give rise to a capital gains tax (CGT) liability. However, a valuable tax relief called private residence relief (PRR) automatically applies on the sale of one’s main home and this relief may exempt all or part of the gain which arises.
