Thanks for your response and asking for me
Due to your husbands posting - then along with the 3 years that this was your main residence, you also could have up to 3 years - but this works on the assumption that you will return to the property, or if you cannot, then its due a geogrpahocal posting eslewehere.
You advise that you only spent 2.5 years away and then did return to Huntingdon (approx and made a further purchase in 2006 so you can only have up until the first 2.5 years as after that you failed to meet the requirements for the last 6 months to also be included.
So we have 5.5 years (approx 65 months) PPR along with the last 18 months of ownership (approx 83 months)
So owned so far for 182 months with a gain of £138,000 x 83/182 = £61418 PPR
So this leaves £76582 gain
Then you also have private lettings releif as you have declared the rental income to HMRC, which is the lesser of
1) The amount o gain on which PPR is awarded on - so £61418
2) The amount of gain left over after PPR has been applied - so £76852 OR
Now at this atge if the property was in joint names - you would each have Priavte lettings releif (so 2 x £40,000) and 2 x annual exemption allowance (so £11,000 x 2)
But you advise this is in your sole name and unless you make the transfer in this tax year (before 05/04/2015) and then sell AFTER 06/04/2015 then you will not be permitted to have the benefit of this being transferred into joint names, so make sure you adhere to the dates.
Doing so will ensure that there is NO capital gain arising, as £76852 - £80,000 (private lettings relief x 2) - NIL
But as the gain has been reduced to NIL due to the private lettings releif awarded you still have to declare the position to HMRC - so do alert them to the change of ownership when it takes place (and split the remianing rental income accordingly) and 2) when the property is sold.
let me know if you have any follow up questions but it would be appreciated if you could rate me for the level of service I have provided - and thank you for your patience in coming to grips with Just Answer.