I bought a cottage 18 years ago and lived in it for 15 years, then let it out to a tenant who is still occupying it. When I come to sell it, how will the CGT be worked out please? I thought it would be the value at sale minus the value when I let it out (and bought my present house), the resulting value being liable for tax. Is that correct?

Arthur Weller replies:
The capital gain will be the difference between what you sell the cottage for, and what you paid for it 18 years ago. This gain is divided by 18, to work out the gain per year. The first 15 years are exempt, as are the last year and a half (final period exemption). The 'middle' year and a half are taxed, but since you rented it out during this period the letting exemption is available to you to reduce the gain attributable to this year and a half