Sonya, thank you for your prompt reply.
Based on information provided, you appear to have made that property your home albeit for a short period.
HMRC requires you to notify them within two years of acquiring a second property as to which property is your main residence. It is not clear from information provided whether this was done.
The fact your husband was on the electrol role with that address would support your claim that it was your main residence.
The gain of £21,000 less any costs associated with sale of the property would qualify for private residence relief and there would be no CGT payable.
Gains allowance for tax year 2007-08 was £9,200.
In the event HMRC contested your claim for PRR, in the worst scenario only (21,000-(9,200x2)) £2,600 would be chargeable to CGT.
You should have reported the gain in your tax return for 2007-08.
You are not liable to IHT.
I hope this is helpful and answers your question.
If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.