My wife and I bought a property together five years ago for £123,000. My wife died two years ago and I was the sole beneficiary of her will. My son lived in it but has very recently passed away. I will sell the property most probably in this tax year for (say) £155,000. I believe I can claim any selling and capital work costs for tax purposes, but as my late wife and I owned the property jointly can I reduce my capital gain to reflect this and if so over what period does my gain apply (e.g. the period since my wife's death?). 

Arthur Weller replies: 

Your base cost for the 50% of the house you bought five years ago is £123,000/2 = £61,500. When your wife died two years ago, you inherited her 50% of the house at probate value (i.e. the market value at the date of death). Let's suppose the probate value of her 50% of the house was (£142,000/2) = £71,000. So your combined base cost for both halves is £61,500 + £71,000 = £132,500. If you sell for £155,000, your capital gain will be £22,500. From this figure you can deduct selling and capital costs, as you have written, and also your capital gains tax annual exemption of £12,300.