Principle Private Residence (or PPR) is the term used to express the Exemption Period applied to a property when you occupy the property as your main residential accommodation.

Property CGT can be complex. Obviously the standard situation is where you purchase a property, move in immediately, moving out upon the subsequent disposal. However if any any other situation applies, it should never been assumed that PPR automatically applies.

The main conditions to be aware of are:

• Period(s) of ownership.
• Period(s) of occupation.
• PPR is based on time apportionment.
• Some unoccupied periods are treated as deemed occupation for special circumstances.

 Warning Buying off Plan & Self Builds:

• Your period of ownership commences from when you sign the contact.
• Your period of occupation does not start until you occupy the property.
• Thus PPR does not apply during the building phase.
• Therefore any delay in the building phase, can result in an unexpected tax liability.

Similarly - If you purchase a property that requires refurbishment prior to occupying said property.

TRAP: -

• The first twelve months count as if you had occupied it - deemed occupation.
• Exceptionally, HMRC will stretch this to two years;
• HMRC applies the two-year deadline strictly, any longer, HMRC will deny your PPR between your acquisition & occupation dates, for the entire period; i.e. you lose the first 12-months deemed occupation as well.
  

PRIOR PLANNING CAN MITIGATE THOUSANDS OF POUNDS OF TAX, SO COMMUNICATION WITH YOUR ACCOUNTANT IS KEY.