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Hello Gina, I am Keith, one of the experts on Just Answer, and happy to help you with your question.
The property is deemed to have been acquired by the pair of youi at its current market value as at April 1997.
Your brother, as he lives overseas, is liable to Capital Gains Tax (CGT) on half the gain made from a 5 April 2015 valuation. In the last 18 months of ownership he is deemed to have been in occupation even if this is not the case, so if the sale takes place before October 2016 he will have no liability anyway as Private Residence Relief (PRR) will have been extended by the 18 month rule. I have taken no account of any equivalent tax that he may be due under the New Zealand tax regime, but as NZ has no CGT and the sale transaction is not within two years of acquisition there would appear to be no liability there.
You will be liable to CGT on half the gain between the market value as at April 1997 plus any improvements (eg installation of double glazing, central heating, extension) but not routine maintenance with can be used to offset rental income. and the disposal value ie what you receive less the selling costs. As you never lived in the house you have no entitlement to Lettings Relief, but you do have an Annual Exempt Amount of 11.1.K to offset the gain. This gain will be taxed at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale. The mortgage does not come into the CGT computation, but the interest element of the mortgage is allowable against rental income for Income Tax purposes. You will have a proportional adjustment to make to reduce the gain to allow for the 18 month rule [say 222/240].
I do hope that my reply has been of assistance.