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Principal Private Residence Relief (‘PPR’) …Do you have more than one home?

Principal Private Residence Relief (‘PPR’) …Do you have more than one home?

If you have more than one home, you can only have one PPR.  However you do have the option of electing which of your homes is your PPR for tax purposes. 

This gives the advantage of protecting the property with the largest potential capital gains on it.

You have two years following the acquisition of your second property within which to make the election, this is made formally to HMRC.  In the absence of an election the PPR is determined on the basis of fact.

Once validly made an election can be varied at any time with retrospective effect of up to two years, giving a good opportunity for capital gains tax planning.

There are plans to withdraw this election which if adopted are likely to have effect from April 2015.  Therefore if you acquired another home within the last two years consider making an election now…before it is too late, the future tax saving could be considerable.

Remember that PPR and also this election, will only apply to your home and as detailed above you must be able to demonstrate that this is the case.

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