Thanks.

When you calculate the gain on the sale of a property, it is treated as having accrued evenly over the entire period of ownership. That makes working out the taxable and non-taxable parts of the gain fairly easy.

For the purposes of this calculation, I've assumed a sale in December 2009 for £350,000 which would give rise to a gain of £260,000 (£350,000 - £260,000). By that time, you had owned the property for 63 months.

The gain for the period the property was your main home will be exempt as will the gain for the previous 24 months of ownership. The last 36 months of ownership of a property that has been your main residence are treated as an exempt period. Since you have lived in it for the last 12 months this is deducted from 36. That accounts for £148,572 (£260,000/63 x 36).

The remaining gain of £111,428 is allocated as to £103,174 to the letting period and £8,254 to the vacant period. As the property was both your main home and let, you are entitled to a deduction from the remaining gain called letting relief which is the lesser of:

1 £40,000,

2 the main residence gain plus the gain for the previous 24 months which is £148,572 and

3 the letting period gain of £103,174.

So, £40,000 of the remaining gain of £111,428 is covered by letting relief leaving £71,428. The first £10,100 is exempt so that leaves £61,328 chargeable to CGT at 18% which would give rise to a tax liability of £11,039 if the property was sold on or before 5 April 2010.

The taxable gain would be reduced by an additional £10,100 for each additional part owner.Tony40182.5173969907