New Forest


Principal Private Residence relief  – marriage & divorce

Why is Principal Private Residence (PPR) relief important?

This relief reduces the chargeable gain made on the sale of a family home. If you have lived in the property as your only, or main home throughout your ownership of it, there is no chargeable gain on the disposal. However, if you didn’t live in it throughout your ownership there may be a chargeable gain taxable at 18% or 28%.


For tax purposes, a married couple may only have one residence between them that may qualify for PPR relief, even if both individuals just have one residence each in their own name.

As part of a tax planning exercise, the couple may wish to nominate a particular property as their main residence in order to mitigate future tax payable on the gains.


When assets transfer over on divorce, the date of separation is key:

If assets are transferred in the tax year of separation, the transfer is deemed to be an inter-spouse transfer and no tax charge arises.
If assets are transferred in the tax year after separation, a chargeable disposal takes place and the consideration is based on market value, which could create a tax charge.

On divorce, the family home will no longer be the PPR of the partner that leaves the home. Broadly speaking, if nine months or more have elapsed after the partner leaves the property, their share of the former main residence will potentially become chargeable to capital gains tax.

For more information on this, please contact Joe Wilson on 023 8046 1237.

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