• Home
  • Latest
  • PPR: Good news for off-plan purchasers

PPR: Good news for off-plan purchasers

Posted on 15 November 2019

PPR: Good news for off-plan purchasers

In Higgins v Revenue and Customs [2019] EWCA Civ 1860, the Court of Appeal reversed the earlier findings which limited principal private residence relief (PPR) where there was a delay between exchange, completion and occupation.

PPR provides full exemption from CGT on the sale of a person's main residence to the extent that the property was used as their main residence throughout their "period of ownership".

As originally discussed in an earlier edition of Tax Aware, Mr. Higgins signed an unconditional purchase agreement of an off-plan apartment in 2006. The purchase completed in 2010 and Mr Higgins occupied it as his main residence from then until his sale in 2011.

HMRC and the Upper Tribunal previously found that his period of ownership for PPR began when the off-plan contract was signed, meaning that he was not eligible for relief in respect of the 2006 to 2010 period. 

Positively for many delayed/off-plan property purchasers, Mr Higgins has won his appeal, with the Court agreeing that his period of ownership for CGT purposes started only when he completed the purchase in 2010, until which time he had no right to occupy. Full PPR would therefore be permitted to eliminate the CGT charge. The Court reasoned that to hold otherwise would mean that few people buying off-plan would be able to claim PPR for the period between exchange and completion. As such, this could not have been parliament's intention.

How can we help you?

How can we help you?

Subscribe: I'd like to keep in touch

If your enquiry is urgent please call +44 20 3321 7000

I'm a client

Please enter your first name
Please enter your last name
Please enter your enquiry
Please enter a value

I'm looking for advice

Please enter your first name
Please enter your last name
Please enter your enquiry
Please select a department
Please select a contact method

Something else

Please enter your first name
Please enter your last name
Please enter your enquiry
Please select your contact method of choice