private residence relief calculator

What is Private Residence Relief?

Private Residence Relief (often called Principal Private Residence Relief or PPR/PRR) can reduce or eliminate Capital Gains Tax (CGT) when you sell a home that has been your main residence. The core idea is simple: if a property was genuinely your main home for all of your ownership period, most or all of your gain is often exempt.

Where ownership includes mixed use periods (for example, living there first and renting it out later), relief is usually apportioned based on qualifying months.

How this calculator works

This calculator follows a practical, simplified flow:

• Calculates your total gain after deducting purchase/sale costs and capital improvements.
• Computes qualifying months (occupation + qualifying absences + final period exemption).
• Applies PRR proportionally: PRR Exempt Gain = Total Gain × (Qualifying Months / Total Months).
• Estimates chargeable gain after PRR and annual exempt amount.
• Applies your chosen CGT rate for an estimated tax figure.

Important assumptions in the model

• Final period exemption is applied only where the home was your residence at some point.
• Qualifying months are capped at total months owned.
• No automatic letting relief is included (rules are specific and narrower than many people expect).
• No inflation indexation, non-resident rules, trust/company treatment, or complex connected-party issues.

Inputs explained

Property and cost inputs

Purchase Price and Sale Price are the starting points. Buying and selling costs can include legal fees, stamp duty, and estate agent fees where allowable. Capital Improvements are value-enhancing works (e.g., extension), not routine repairs.

Time-based inputs

Total Ownership (months) is the period from acquisition to disposal. Months lived in as main residence should reflect actual occupation as your main home. Qualifying absence months may apply for certain periods (subject to conditions). Final period exemption is commonly used as a short automatic relief at the end of ownership.

Worked example

Suppose your adjusted gain is £100,000 and your qualifying period is 90 out of 120 months. PRR exempts 75% of the gain, i.e. £75,000. The remaining £25,000 is potentially chargeable. If annual exemption is £3,000, taxable gain is £22,000. At a 24% rate, estimated CGT is £5,280.

Common mistakes to avoid

• Counting repair costs as improvements.
• Using years instead of months and introducing rounding errors.
• Forgetting to include acquisition/disposal costs.
• Assuming every absence automatically qualifies.
• Applying outdated annual exemptions or tax rates.

Practical next steps before filing

• Gather completion statements, invoices, and legal records.
• Document periods of residence and any relevant absences.
• Check current HMRC rules for your disposal tax year.
• Take professional advice for mixed-use, partial business use, or complicated ownership structures.

Final note

This private residence relief calculator is designed to be transparent and easy to audit. It gives you a strong first-pass estimate, but it is not a substitute for professional tax advice tailored to your circumstances.