I purchased two properties for £150,000 approximately 15 years ago. I purchased one property outright and then obtained a mortgage on the second one.  The current market value is £270,000 each. I recently inherited some money, and in May of this year was able to pay off the mortgage on the second property. Both properties are rented out and always have been since I purchased them. I have never lived in either, but am I correct in thinking that if I moved into these as my primary home for a period of time before selling, capital gains tax (CGT) would not be relevant? I would like to know how long I have to live in these houses as my primary home, as at the moment, I live with my parents, so I do not own any other properties. 

Arthur Weller replies:  

If you move into one of these properties as your primary home, the time you live in it will be free of CGT, but not the time you didn't live in it. Let's say you paid £150,000 for the property fifteen years ago, and now you move into it for five years and sell it in five years' time for £350,000. Your capital gain will be £200,000, spread over twenty years of ownership, or £10,000 capital gain per year. The last five years, equivalent to £50,000 gain, will be exempt. But you will have to pay CGT on the capital gain of £150,000.