Hi Jo

Thanks for your question

Assuming a sale now

The initial gain is the sale prices less the purchase price, so this would leave a gain of £175,000

From which can be deducted the costs to buy and sell, so £4050 for buying and approx £6000 to sell (I have estimated this cost) so total of £10050 and the costs of any major renovations, such as new kitchen, new roof etc

Using the gain of £164,950 then the reliefs are considered.

Private residence relief allows for the time that you lived there and the last 36 months - so 69 months/ 132 months (total ownership) x £164,950 = £88,223

This leaves a gain of £76,727

Then as this was your main residence and you have let this out throughout (and I assume declared the rental income to HMRC) private lettings relief is considered

This is the lesser of

1) The amount on which private residence relief was allowed - so £88,223

2) the amount of gain left over after private residence relief has been applied - so £76,727 OR

3) £40,000

As the lesser is £40,000 this is deducted from £76,727 - leaving a final gain of £36,727

The first £10,600 is your annual exemption leaving the remaining gain of £26,127 x 28% (as you are a higher rate taxpayer) = £7315.56

Thanks

Sam