I (along with my sibling) were gifted a share of our old family home by our parents shortly after they moved out. We were not resident there at that point but had all previously lived in the property for over ten years. At the time of transfer, no gains were due as it was within 18 months of it ceasing to be their main residence. The property was let out at the time of transfer and has been since then. When we come to sell, I understand we'll need to pay capital gains tax (CGT) on the difference between the valuation at the time of transfer, and its sale price. As I understand it, my parents (who still own a 25% share) will be entitled to lettings relief on the gain between when it ceased to be their main residence and any sale, and main residence relief for the time before that. Will I pay full CGT on the period between the gift and the sale, or can I also claim lettings relief? It was previously my main residence (over 15 years), but I didn't own it at that time.

Arthur Weller replies:
You need to pay full CGT on the difference between the valuation at the time of transfer, and the sale price. The lettings relief is not relevant because this property has never qualified as your main residence, because, as you have written, your occupation of the house occurred before you began to own any part of the house. See HMRC’s Capital Gains manual at www.gov.uk/hmrcinternal-manuals/capital-gains-manual/cg64930.