Principal Private Residence (PPR) restriction for married couples living apart

Capital Gains Tax » June 4, 2024

PPR Relief living separate

We will be publishing some of the most frequent questions we have received and our answers to them.  Please note we have changed some parts of the questions to protect client’s information. You should always seek professional tax advice before taking any action.

Q: Our clients are getting divorced, they have been married for 12 years and always lived in separate properties.  As they have always lived in the properties as their main homes, are they both exempt from capital gains tax?

A: Frustratingly, the answer to the above question is no.

PPR relief is a tax relief available on the sale or transfer of the main home. A married couple can only have one PPR between them.  These rules are detailed at TCGA 1992, s 222(6). 

The result of this is that they must choose which property will be their joint main home for tax purposes.  This means that one will be exempt from capital gains tax and the other will be subject to capital gains tax.

This is a really tricky concept to explain to couples and it only impacts married couples.  Once a couple have separated, they are each entitled to PPR relief on their own properties from the point of separation.

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