PPR Calculation

PPR Calculation

9:50 AM, 15th September 2014, About 8 years ago 1

Text Size

This came up while on holiday with friends who are considering selling a rented property. They and others were convinced they did not have to pay CGT if they had owned it for 10+ years, until I poured cold water on that notion. However, I was not entirely clear about the actual rules and calculations. PPR Calculation

I believe this was discussed some while back, but can someone please provide a ‘simple’ method of calculating the CGT liability on a property owned for 10 years, lived in for 2 years, rented for 8 years, then nominated as PPR before selling. Purchase price £260,000. Potential sale price £530,000.

Many thanks.

Lou Valdini


by Mark Alexander

9:58 AM, 15th September 2014, About 8 years ago

Hi Lou

PPR relief is calculated as a percentage of the gain based on the period of occupancy as a percentage of the ownership period. In your example, the period of occupancy has been 20% of the period of ownership, hence 20% of the gain will not be taxable. There is a minimum period of 18 months (previously three years) but as the period of occupancy is the greater, in this instance that will be the figure used.

If the property was owner occupied BEFORE it was let then Letting Relief will also apply. This effectively doubles the PPR relief, in this case to 40% of the gain.

If the owners intend to move back into the property (GENUINELY) then the figures will change as the term of ownership will also change. The Lettings Relief will not change, of that I am certain, but I don't know whether another minimum 18 months of PPR relief will be applicable or not.

Please seek professional advice - see >>> http://www.property118.com/member/?id=452

Leave Comments

Please Log-In OR Become a member to reply to comments or subscribe to new comment notifications.

Forgotten your password?


Landlord Tax Planning Book Now