Provided your parents met the criteria here
, you will qualify for main residence relief for the period that they lived there and for letting relief as the property was also let as well as having been their main home.Take a look at HS283 here
for more information. As Capital Gains Tax was rebased to 31 March 1982, only the period thereafter is taken into account. When the property was sold you made a gain of £84,000 (£97,000 - £13,000), £42,000 for each of yourself and your wife. You owned it for 400 months (from 31/3/82). It was occupied by dependent relatives for 179 months, it was let for 214 months and it was empty for 7 months. The following figures apply to each of you:
The gain for the period was your parents' home will be exempt as will the gain for the last 18 months of ownership. That accounts for £20,685 (£42,000 / 400 months x 197 months). That leaves £21,315 (£42,000 / 40 months x 203 months).
As the property was the home of dependent relatives and it was let, letting relief is due. This will be the lesser of:
2 £20,685 and
Letting relief of £20,685 will reduce the remaining gain of £21,315 to £630 and the annual CGT exemption of £11,100 will cover the balance so no CGT will be payable.
I hope this helps but let me know if you have any further questions.