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If you own property and are resident in the UK for tax purposes when you sell the property, there could be a liability in the form of Capital Gains Tax or income/corporation tax if you are a property developer.

The most notable exception to this general rule is if the property you are selling is your principal private residence. For most of us this is our home, the place where we live.

Of course some of us may own more than one property. In which case how does the PPR rule apply?The answer, as you would expect, is complicated. Generally speaking, if you own two properties only one can be considered your PPR at a particular point in time. If you are not able to choose, this is determined to be the property used more frequently.

However you can choose which property is treated as your PPR within 2 years of acquiring a second residence. Having made the choice, it can be changed at any time and backdated 2 years. Why would you do this? The main tax advantage is that PPR status exempts the last three years of ownership from Capital Gains Tax - in some circumstances other tax breaks may apply if the property has been let. You will need evidence that you actually took up residence in the second property.

If you have a second property and spend reasonable amounts of time in residence, this is a strategy you may want to consider especially if your intention is to sell one of the properties in the medium term.

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