My mum and dad are in the process of selling their old home. They lived there from 1978 until 2008 and since then it has been used as a storage building for my dad and also he has rented it out but only for short periods, possibly for two years. The past year it has been totally empty. He has a mortgage of £105,000 on it and sold it for £240,000. Will he have to pay tax on this, and if so, how much? 

Arthur Weller replies: 

Your parents owned the house for 43 years, of which it was their home for 30 years. The last 13 years are taxable, less the final period exemption of nine months. Let's say they bought it for £111,000, so that it has gone up £129,000 over 43 years. This is a gain of £3,000 per year. The capital gain will be 12.25 years multiplied by £3,000 = £36,750. If your parents jointly owned the house, each will have a capital gain of £18,375, and the CGT annual exemption of £12,300 against their half of the capital gain, resulting in a taxable capital gain of £6,075. Obviously, you will have to adjust my figures, taking into account the actual purchase price.