My wife and I have lived in our jointly-owned property for nine years and seven months. My wife is also the sole owner of a property, which has been rented out for 22 years. My wife now plans to give notice to the tenants of the rented property; when it is vacant, we intend to move into the formerly rented property on a permanent basis. We then plan to sell our jointly owned property. Will my wife be subject to any capital gains tax (CGT) on the formerly rented property, and can we sell our existing jointly-owned home without incurring any CGT? 

Arthur Weller replies  

Let's assume that you and your wife move into the formerly rented property as your main residence for (say) eight years, and then sell it. The capital gain will be the difference between what it was originally bought for and what it will be sold for. Then 22/30 of the gain will be subject to CGT, and 8/30 will be exempt. As for your jointly-owned property, I assume that you have owned it and lived in it for the entire nine years and seven months. If so, all the gain on it should be exempt from CGT, due to principal private residence relief.