diff --git a/WPThemeReview/Sniffs/CoreFunctionality/PrefixAllGlobalsSniff.php b/WPThemeReview/Sniffs/CoreFunctionality/PrefixAllGlobalsSniff.php
new file mode 100644
index 00000000..b50716d8
--- /dev/null
+++ b/WPThemeReview/Sniffs/CoreFunctionality/PrefixAllGlobalsSniff.php
@@ -0,0 +1,188 @@
+<?php
+/**
+ * WPThemeReview Coding Standard.
+ *
+ * @package WPTRT\WPThemeReview
+ * @link    https://github.com/WPTRT/WPThemeReview
+ * @license https://opensource.org/licenses/MIT MIT
+ */
+
+namespace WPThemeReview\Sniffs\CoreFunctionality;
+
+use WordPressCS\WordPress\Sniffs\NamingConventions\PrefixAllGlobalsSniff as WPCSPrefixAllGlobalsSniff;
+
+/**
+ * Verify that everything defined in the global namespace is prefixed with a theme specific prefix.
+ *
+ * This sniff extends the upstream WPCS PrefixAllGlobalsSniff. The differences are:
+ * - For non-prefixed global variables, an error will only be thrown when the variable
+ *   is created outside of a theme template file.
+ *
+ * @link https://github.com/WPTRT/WPThemeReview/issues/205
+ * @link https://github.com/WPTRT/WPThemeReview/issues/201
+ * @link https://github.com/WPTRT/WPThemeReview/issues/200
+ *
+ * The sniff does not currently allow for mimetype sublevel only file names,
+ * such as `plain.php`.
+ *
+ * @since 0.2.0
+ */
+class PrefixAllGlobalsSniff extends WPCSPrefixAllGlobalsSniff {
+
+	/**
+	 * Regex to recognize more complex typical theme template file names.
+	 *
+	 * @link https://developer.wordpress.org/themes/basics/template-hierarchy/#single-post
+	 * @link https://developer.wordpress.org/themes/basics/template-hierarchy/#custom-taxonomies
+	 * @link https://developer.wordpress.org/themes/basics/template-hierarchy/#custom-post-types
+	 * @link https://developer.wordpress.org/themes/basics/template-hierarchy/#embeds
+	 * @link https://developer.wordpress.org/themes/basics/template-hierarchy/#attachment
+	 * @link https://developer.wordpress.org/themes/template-files-section/partial-and-miscellaneous-template-files/#content-slug-php
+	 * @link https://wphierarchy.com/
+	 * @link https://en.wikipedia.org/wiki/Media_type#Naming
+	 *
+	 * @since 0.2.0
+	 *
+	 * @var string
+	 */
+	const COMPLEX_THEME_TEMPLATE_NAME_REGEX = '`
+		^                    # Anchor to the beginning of the string.
+		(?:
+							 # Template file prefixes with subtype.
+			(?:archive|author|category|content|embed|page|single|tag|taxonomy)
+			-[^\.]+          # These need to be followed by a dash and some chars.
+		|
+			(?:application|audio|example|font|image|message|model|multipart|text|video) #Top-level mime-types
+			(?:_[^\.]+)?     # Optionally followed by an underscore and a sub-type.
+		)\.php$              # End in .php and anchor to the end of the string.
+	`Dx';
+
+	/**
+	 * The list of allowed folders to check the file path against.
+	 *
+	 * The WPThemereview standards contains a base set for this property in the ruleset.xml.
+	 * This array can be extended in a custom ruleset.
+	 *
+	 * @since 0.2.0
+	 *
+	 * @var array
+	 */
+	public $allowed_folders = [];
+
+	/**
+	 * List of plain template file names.
+	 *
+	 * @link https://developer.wordpress.org/themes/basics/template-hierarchy/
+	 * @link https://developer.wordpress.org/themes/template-files-section/partial-and-miscellaneous-template-files/#content-slug-php
+	 * @link https://wphierarchy.com/
+	 * @link https://en.wikipedia.org/wiki/Media_type#Naming
+	 *
+	 * @since 0.2.0
+	 *
+	 * @var array
+	 */
+	protected $simple_theme_template_file_names = [
+		// Plain primary template file names.
+		'404.php'         => true,
+		'archive.php'     => true,
+		'home.php'        => true,
+		'index.php'       => true,
+		'page.php'        => true,
+		'search.php'      => true,
+		'single.php'      => true,
+		'singular.php'    => true,
+
+		// Plain secondary template file names.
+		'attachment.php'  => true,
+		'author.php'      => true,
+		'category.php'    => true,
+		'date.php'        => true,
+		'embed.php'       => true,
+		'front-page.php'  => true,
+		'single-post.php' => true,
+		'tag.php'         => true,
+		'taxonomy.php'    => true,
+
+		// Plain partial and miscellaneous template file names.
+		'comments.php'    => true,
+		'footer.php'      => true,
+		'header.php'      => true,
+		'sidebar.php'     => true,
+
+		// Top-leve mime types.
+		'application.php' => true,
+		'audio.php'       => true,
+		'example.php'     => true,
+		'font.php'        => true,
+		'image.php'       => true,
+		'message.php'     => true,
+		'model.php'       => true,
+		'multipart.php'   => true,
+		'text.php'        => true,
+		'video.php'       => true,
+	];
+
+	/**
+	 * Check that defined global variables are prefixed.
+	 *
+	 * This overloads the parent method to allow for non-prefixed variables to be declared
+	 * in template files as those are included from within a function and therefore would be
+	 * local to that function.
+	 *
+	 * @since 0.2.0
+	 *
+	 * @param int $stackPtr The position of the current token in the stack.
+	 *
+	 * @return int|void Integer stack pointer to skip forward or void to continue
+	 *                  normal file processing.
+	 */
+	protected function process_variable_assignment( $stackPtr ) {
+
+		// Usage of `strip_quotes` is to ensure `stdin_path` passed by IDEs does not include quotes.
+		$file = $this->strip_quotes( $this->phpcsFile->getFileName() );
+
+		$fileName = basename( $file );
+
+		if ( \defined( '\PHP_CODESNIFFER_IN_TESTS' ) ) {
+			$fileName = str_replace( '.inc', '.php', $fileName );
+		}
+
+		// Don't process in case of a template file or folder.
+		if ( isset( $this->simple_theme_template_file_names[ $fileName ] ) === true ) {
+			return;
+		}
+
+		if ( preg_match( self::COMPLEX_THEME_TEMPLATE_NAME_REGEX, $fileName ) === 1 ) {
+			return;
+		}
+
+		if ( $this->is_from_allowed_folder( $file ) ) {
+			return;
+		}
+
+		// Not a typical template file name, defer to the prefix checking in the parent sniff.
+		return parent::process_variable_assignment( $stackPtr );
+	}
+
+	/**
+	 * Checks if the given file path is located in the $allowed_folders array.
+	 *
+	 * @since 0.2.0
+	 *
+	 * @param  string $path Full path of the sniffed file.
+	 * @return boolean
+	 */
+	private function is_from_allowed_folder( $path ) {
+		if ( empty( $this->allowed_folders ) || ! is_array( $this->allowed_folders ) ) {
+			return false;
+		}
+
+		foreach ( $this->allowed_folders as $folder ) {
+			if ( strrpos( $path, DIRECTORY_SEPARATOR . $folder . DIRECTORY_SEPARATOR ) !== false ) {
+				return true;
+			}
+		}
+
+		return false;
+	}
+}
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/attachment.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/attachment.inc
new file mode 100644
index 00000000..317016b0
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/attachment.inc
@@ -0,0 +1,7 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+<?php
+
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // OK, template file.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/footer_widgets.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/footer_widgets.inc
new file mode 100644
index 00000000..efeb89d9
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/footer_widgets.inc
@@ -0,0 +1,7 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+<?php
+
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // Error. Not in a template file.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/header.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/header.inc
new file mode 100644
index 00000000..317016b0
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/header.inc
@@ -0,0 +1,7 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+<?php
+
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // OK, template file.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/page-recent-news.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/page-recent-news.inc
new file mode 100644
index 00000000..317016b0
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/page-recent-news.inc
@@ -0,0 +1,7 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+<?php
+
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // OK, template file.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/page-templates/layouts/page_two-columns.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/page-templates/layouts/page_two-columns.inc
new file mode 100644
index 00000000..50f0ea5e
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/page-templates/layouts/page_two-columns.inc
@@ -0,0 +1,8 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals allowed_folders[] template-parts,templates,partials,page-templates
+<?php
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // OK, file in allowed folder.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals allowed_folders[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/partials/post-edit.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/partials/post-edit.inc
new file mode 100644
index 00000000..50f0ea5e
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/partials/post-edit.inc
@@ -0,0 +1,8 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals allowed_folders[] template-parts,templates,partials,page-templates
+<?php
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // OK, file in allowed folder.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals allowed_folders[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/social-share.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/social-share.inc
new file mode 100644
index 00000000..efeb89d9
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsTests/social-share.inc
@@ -0,0 +1,7 @@
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[] my_theme
+<?php
+
+$my_theme_var = 123; // OK, prefixed.
+$var = 'Value'; // Error. Not in a template file.
+
+// phpcs:set WPThemeReview.CoreFunctionality.PrefixAllGlobals prefixes[]
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsUnitTest.inc b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsUnitTest.inc
new file mode 100644
index 00000000..37237039
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsUnitTest.inc
@@ -0,0 +1,2 @@
+<?php
+// Dummy file. The real test files are in the PrefixAllGlobalsTests subfolder.
diff --git a/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsUnitTest.php b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsUnitTest.php
new file mode 100644
index 00000000..db6296ad
--- /dev/null
+++ b/WPThemeReview/Tests/CoreFunctionality/PrefixAllGlobalsUnitTest.php
@@ -0,0 +1,69 @@
+<?php
+/**
+ * Unit test class for WPThemeReview Coding Standard.
+ *
+ * @package WPTRT\WPThemeReview
+ * @link    https://github.com/WPTRT/WPThemeReview
+ * @license https://opensource.org/licenses/MIT MIT
+ */
+
+namespace WPThemeReview\Tests\CoreFunctionality;
+
+use PHP_CodeSniffer\Tests\Standards\AbstractSniffUnitTest;
+
+/**
+ * Unit test class for the PrefixAllGlobals sniff.
+ *
+ * @package WPTRT\WPThemeReview
+ *
+ * @since 0.2.0
+ */
+class PrefixAllGlobalsUnitTest extends AbstractSniffUnitTest {
+
+	/**
+	 * Get a list of all test files to check.
+	 *
+	 * @param string $testFileBase The base path that the unit tests files will have.
+	 *
+	 * @return string[]
+	 */
+	protected function getTestFiles( $testFileBase ) {
+		$sep        = \DIRECTORY_SEPARATOR;
+		$test_files = glob( dirname( $testFileBase ) . $sep . 'PrefixAllGlobalsTests{' . $sep . ',' . $sep . '*' . $sep . '}*.inc', \GLOB_BRACE );
+
+		if ( ! empty( $test_files ) ) {
+			return $test_files;
+		}
+
+		return array( $testFileBase . '.inc' );
+	}
+
+	/**
+	 * Returns the lines where errors should occur.
+	 *
+	 * @param string $testFile The name of the file being tested.
+	 * @return array <int line number> => <int number of errors>
+	 */
+	public function getErrorList( $testFile = '' ) {
+		switch ( $testFile ) {
+			case 'footer_widgets.inc':
+			case 'social-share.inc':
+				return array(
+					5 => 1,
+				);
+
+			default:
+				return array();
+		}
+	}
+
+	/**
+	 * Returns the lines where warnings should occur.
+	 *
+	 * @return array <int line number> => <int number of warnings>
+	 */
+	public function getWarningList() {
+		return array();
+	}
+
+}
diff --git a/WPThemeReview/ruleset.xml b/WPThemeReview/ruleset.xml
index a609652b..d1b0e3ba 100644
--- a/WPThemeReview/ruleset.xml
+++ b/WPThemeReview/ruleset.xml
@@ -127,8 +127,17 @@
 	<!-- Verify that everything in the global namespace is prefixed. -->
 	<!-- Covers: https://make.wordpress.org/themes/handbook/review/required/#code - last bullet. -->
 	<!-- NOTE: this sniff needs a custom property to be set for it to be activated. -->
-	<!-- See: https://github.com/WordPress-Coding-Standards/WordPress-Coding-Standards/wiki/Customizable-sniff-properties#naming-conventions-prefix-everything-in-the-global-namespace-->
-	<rule ref="WordPress.NamingConventions.PrefixAllGlobals"/>
+	<!-- See: https://github.com/WordPress-Coding-Standards/WordPress-Coding-Standards/wiki/Customizable-sniff-properties#naming-conventions-prefix-everything-in-the-global-namespace -->
+	<rule ref="WPThemeReview.CoreFunctionality.PrefixAllGlobals">
+		<properties>
+			<property name="allowed_folders" type="array">
+				<element value="template-parts"/>
+				<element value="templates"/>
+				<element value="partials"/>
+				<element value="page-templates"/>
+			</property>
+		</properties>
+	</rule>
 
 	<!-- Check for correct spelling of WordPress. -->
 	<!-- Covers: https://make.wordpress.org/themes/handbook/review/required/#naming - third bullet. -->