Hi.You will pay CGT on the sale proceeds less the sitting tenant value of the property when you inherited it, £100,000. Had you sold it as soon as you inherited it, you would only have received £100,000 (assuming the valuations at the time were accurate) because of the sitting tenant. A sitting tenant with secure tenure will devalue a property in the same way as plans for a motorway at the bottom of the garden will. A valuation should reflect all encumbrances.I hope this helps but let me know if you have any further questions.
The mortgage has no effect on the calculation of the gain on the sale of a property. If it did, everybody would get mortgaged to the hilt and never pay CGT.If you had bought the property, you might have used a mortgage to help fund the purchase price. The purchase price is obviously taken account of in the gain calculation and the mortgage, if there is one, is included in that figure.