I have a home that for the first four years was a second holiday home (not let out). This has been my primary residence for the last two years (six years total ownership). I am married but we live separately apart from weekends when my husband joins me (as I work from home and need quiet!). In the next year or so, I’m likely to sell and retire. Will I have to pay capital gains tax (CGT) if I’ve lived there permanently for two to three years? 

Arthur Weller replies:  

If you sell after owning it for seven years, having lived in it for the last three years of ownership, then 4/7 of the gain will be subject to CGT, and 3/7 of the gain will be exempt. So, if you bought it for £300,000 and are selling it after seven years of ownership for £370,000, the gain is £70,000, or £10,000 per year, and you will be subject to CGT on £40,000.  

Since you are married, and based on the definition of 'living together' (see HMRC’s Capital Gains Manual at CG22070), you and your husband are living together. The relevant rules state that a husband and wife are only allowed one principal private residence between them (see CG65300). Your husband must be living somewhere else during the week. My answer assumes that you and your husband have nominated this house that we are discussing as your main residence; or that even if you haven't made an election, nevertheless per the criteria outlined in HMRC’s guidance at CG64545, this house that we are discussing is more the family's main residence than the other house that your husband lives in.