capital gains tax

[mrs clueless]

will i owe capital gains tax on a property i have owned for 3 years but only lived in for the last 3 months? i bought the property when my husband was diagnosed as terminally ill but he didn't want to move so it has been left empty until he passed away and i was able to sell our previous home. i now want to sell and move to somewhere smaller. our previous home was solely in the name of my late husband. please advise.

[fredpuli47]

http://www.direct.gov.uk/en/MoneyTaxAndBenefit s/Taxes/TaxOnPropertyAndRentalIncome/DG_402089 0

Gives you the principles and the exceptions and how they work, as well as where to ask about your own case

[kags]

If you have lived in the property genuinely, even if only for 3 months then the last 36 months of ownership would be exempt from Capital Gains Tax . If the total period of ownership is longer than 36 months, then only the proportion relating to the excess would be chargeable - eg if you owned it for 38 months, only 2/38ths of the rise in value would be liable to tax and would probably be covered by your annual exemption (�9200). You may also be entitled to a taper relief of 5%, depending on whether you sell before or after 5 April 2008. Costs of purchase and sale are also deductable from any gain. If there is still a tax liability after this, then it would be worth explaining the specific details to HMRC to see if they would make any special concessions.