The following figures are for each of you:SALE (EXCHANGE OF CONTRACTS) BY 5 APRIL 2014
If you sell the property by 5 April 2014, you will make a gain of £215,000, £107,500 for each of yourself and your wife. By that time, you will have owned it for 153 months of which you will have lived in it for 38 and let it for 115
The gain for the period the property was your main home will be exempt from CGT as will the gain for the last 36 months of ownership. That accounts for 51,993 (£107,500 / 153 x 74). The remaining gain of 55,507 is that part of the letting period gain not covered by the last 36 months of ownership (£107,500 / 153 x 79).
As the property was both your main home and it was let you are entitled to letting relief which is the lesser of:
2 the sum of the main residence gain and the gain for the last 36 months of ownership of the property which is £51,993 and
3 the letting period gain of £55,507.
Letting relief of £40,000 will reduce the remaining gain of £55,507 to £15,507 and the annual CGT exemption of £10,900 will reduce it further to leave you with a taxable gain of £4,607.SALE (EXCHANGE OF CONTRACTS) AFTER 5 APRIL 2014
The exemption for the last 36 months of ownership is being reduced to an exemption for the last 18 months of ownership with effect from 6 April 2014. So, if you sell on 6 April 2014, the figures will be as follows:
Exempt gain £39,346 (£107,500 / 153 x 56).
Letting period gain £68,154 (£107,500 / 153 x 97).
Letting relief £40,000.
Taxable gain £17,154 (£68,154 - £40,000 LR - £11,000 CGT AE).
There are two rates of CGT, 18% and 28%. The rate or combination of rates you will pay will be dependent on the level of your income in the tax year of disposal of the property. Assuming you sell the property in the 2013/14 tax year, the following will apply:
1 If your income in 2013/14 including the taxable gain is £41,450 or less then all the taxable gain will be taxed at 18%.
2 If your income in 2013/14 excluding the taxable gain is more than £41,450 then all the taxable gain will be taxed at 28%.
3 If your income in 2013/14 excluding the taxable gain is less than £41,450 but more than £41,450 when you include the taxable gain then part of it will be taxed at 18% and part at 28%.
The 2014/15 tax bands are not significantly different to the 2014/15 bands.
There is more information on the main residence and CGT in the HMRC helpsheet HS283
I hope this helps but let me know if you have any further questions.