When your husband put the property into joint names, you took half the original cost, £20,000, and the purchase date as your own. You inherited the other half of the property when your husband passed away so that half has a CGT cost of £95,000. Your total cost for CGT purposes is £115,000. If you sell the property for £210,000, you will make a gain of £95,000.
SALE (EXCHANGE OF CONTRACTS) BY 5 APRIL 2014
By April 2014, the total ownership period will have been 343 months. Your husband lived in the property for 24 months and it will have been let for 319 months.
The gain for the period the property was your husband's main home (and yours by extension) willl be exempt from CGT as will the gain for the last 36 months of ownership. That accounts for £16,618 (£95,000 / 343 x 60). The remaining gain of £78,382 is that part of the letting period gain which is not covered by the last 36 months of ownership (£95,000 / 343 x 283).
As the property was both your husband's main home (and yours by extension) and it was let you are entitled to letting relief which is the lesser of:
2 the sum of the main residence gain and the gain for the last 36 months of ownership of the property which is £16,618 and
3 the letting period gain of £78,382.
Letting relief of £16,618 will reduce the remaining gain of £78,382 to £61,764 and the annual CGT exemption of £10,900 will reduce it further to leave you with a net taxable gain of £50,864.
SALE (EXCHANGE OF CONTRACTS) AFTER 5 APRIL 2014
The exemption for the last 36 months of ownership is being reduced to an exemption for the last 18 months of ownership with effect from 6 April 2014. So, if you sell on 6 April 2014, the figures will be as follows:
Exempt gain £11,633
Letting period gain £83,367
Letting relief £11,633
Taxable gain £71,734 less annual CGT exemption of £11,000 leaves a net taxable gain of £60,734.
There are two rates of Capital Gains Tax, 18% and 28%. The rate or combination of rates that will be charged will depend on the level of your income in the tax year you dispose of the property. For a sale in 2013/14, one of the following scenarios would apply:
1 If your income in 2013/14 including the taxable gain is £41,250 or less, then all the taxable gain will be charged at 18%.
2 If your income in 2013/14 excluding the taxable gain is more than £41,250, then all the taxable gain will be charged at 28%.
3 If your income in 2013/14 excluding the taxable gain is less than £41,250 but more than £41,250 when you add the taxable gain to it, some of the taxable gain will be charged at 18% and some at 28%.
The figures for 2014/15 will be similar, save for the taxable gain being larger.
How long you would need to live in the property to wipe out the taxable gain is really impossible to say as it will depend on what happens to property prices and tax rules in the future.
I hope this helps but let me known if you have any further questions.