Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to assist you with your question.
Firstly forget all about loans and the interest thereon. They do not come into the Capital Gains Tax (CGT) computation. The interest element of such loans is, however, allowable against rental income for Income Tax purposes.
CGT is levied on the gain made on disposal. The gain is the difference between the acquisition and the disposal price.
The acqusition price is 34.5K + 50K = 84.5K. You can add purchase costs including Stamp Duty Land Tax to this figure.
The disposal price is 120K less selling costs eg estate agents,' solicitors' fees, advertising etc.
120K - 84.5K = 35.5K less your Annual Exempt Amount (AEA) of 11.1K leaves 24.4K liable to CGT. This 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. Worst case scenario is a tax bill of a tad over 6.8K.
You have not indicated if the house was let out and if it was did you occupy it at any time? This may alter my figures as indeed will any selling costs.
I do hope that my answer has shed some light on your CGT position.