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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
Your ownership time is 28 years. Your let period is 23.5 years as you are deemed to be in residence for the last 18 months of ownership even if this is not the case. 23.5 / 28 is say 84% of the gain taxable, say 252K. Now knock off your non cumulative Annual Exempt Amount (AEA) of 11.1K and Lettings Relief (LR) 40K leaves say 201K exposed to Capital Gains Tax (CGT) which is levied at 18% or 28% or a combination of the two rates depending on your income including the gain in the tax year of sale.
You have said 'our.' If it is jointly owned then each of you will be liable for half of the gain and each of you can deduct AEA and LR. Worst case scenario is a tax bill of a tad under 21K each.
I do hope that you have found my reply of assistance.
I would advise you to read the article from Inheritance Solutions UK which you can find here:
It provides a good summary of the pitfalls.
Remember, the rules on Inheritance Tax (IHT) are changing and the family home left to children tax free rises progressively up to one million from 2017 to 2020. A short term reducing life insurance policy could protect your position.
Thank you for your support.