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Principal Private Residence Relief and Lettings Relief

There were some notable changes to principal private residence (PPR) relief and lettings relief from 6 April 2020.

PPR relief is available for any period where a residential property has been your only or main residence.  For disposals before 6 April 2020, any property that had been your only or main residence at any point during the period of ownership would have automatically qualified for PPR relief for the last 18 months of ownership.

For disposals from 6 April 2020 onwards, the final period of ownership for PPR relief purposes was reduced to 9 months. There is an exception for the disabled and long-term residents of care homes and their spouses or civil partners for whom the exempt period is extended to 36 months.

In addition, for disposals before 6 April 2020, if a property qualified for PPR relief then lettings relief was also available for any period when the property was let or available for let.  Lettings relief was restricted to the lower of the relief for the actual period or periods that the property was let, the available PPR relief, or £40,000 (£80,000 where the property was owned in joint names).

However, for disposals from 6 April 2020 onwards, lettings relief is only available for periods where the owner has shared occupation with a tenant or tenants.  This will effectively remove the availability of lettings relief on most rental properties.

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Author: Plus Accounting

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Date Published: 16 March 2020

Last Updated: 07 March 2023