Jon Golding assesses several unfamiliar principal private residence relief exemptions and some of the restrictions of relief that can reduce the capital gains tax exemption.
Principal private residence (PPR) relief is a very valuable capital gains tax (CGT) exemption. It covers buildings and accompanying land of up to half a hectare (1.236 acres), or such larger area as is required for the ‘reasonable enjoyment’ of that property. This larger area has been tested on many occasions, with varying degrees of success before the courts.
In relation to the size of the private residence, it can be a large house with appropriately large grounds, as one would expect with a landed estate. This matter was reviewed in Phillips v HMRC [2020] UKFTT 381 TC, where the taxpayer’s case was allowed. In that case, 0.94 hectares were claimed to be exempt from CGT when part of the grounds of 0.64 hectares was to be sold to
