I bought a house with a friend around 20 years ago for £120,000. I lived there for around five years, and he has subsequently lived there with his civil partner. We own the property 50% each, and I am a 40% taxpayer; the house has never been let out, and they have exclusive use of it. The property is worth around £420,000 now. When it is sold, will my 50% share attract capital gains tax (CGT?) If so, how can we minimise this? 

Arthur Weller replies:  

Unfortunately, you will be subject to CGT on your 50% share of the £300,000 capital gain. The fact that you didn't use the flat personally, or rent it out, for the past 15 years is irrelevant to the tax situation. If someone owns a property, and leaves it empty, and then sells it and makes a gain, they will still be liable to CGT on the gain. However, you will be entitled to relief for the period you lived in the property as your main residence, plus the last nine months final period exemption. So, if you made a gain of £150,000 over 20 years, that is £7,500 per year. You are entitled to deduct ((5 * 7,500) plus (0.75 * 7,500)) = £43,125 from the capital gain of £150,000, and pay CGT on only £106,875.