My client is considering demolishing his main residence of 10 years and rebuilding a new one. Could it affect their entitlement to claim principal private residence relief (PPR)?

Section 222 TCGA 1992 refers to a gain arising to an individual on the disposal of an asset which is ‘a dwelling-house or part of a dwelling-house which is or has at any time in his period of ownership been, his only or main residence’. It implies that PPR relates to the dwelling itself and if the dwelling is demolished then PPR cannot be due.

This was paramount in the case of Gibson v HMRC [2013] UKFTT 636 (TC). In February 2003 Paul Gibson purchased a property called Moles House, which HMRC accepted was his main residence.