Much depends on whose name(s) appear on the deeds – who actually does own the house? Also, have you lived in the house throughout the whole period of ownership by your family or was there a period when just your daughter was there?
If it’s yours and your husband’s names on the deeds and you have been in the house throughout, there would be no capital gains tax to pay. When you sell, there will be a mortgage to repay (including your daughter’s).
It gets more involved if your daughter’s name is on the deeds as well as yours – the three of you as joint owners. If that's the case, and assuming you have been living there throughout, your two thirds of the gain would be exempt from capital gains tax. Your daughter’s one third of the gain would be partly taxable.
On the figures you provide, she lived in the house as her main residence for three years, then has been away for 10 years, during which time she had another property. That means of the one third of any gain that would be hers, 3/13ths counts as exempt as she was living there; a further 3/13ths is exempt as the last three years of ownership is exempt from capital gains tax in any event.
So that means 7/13ths of one third of any gain on the house would potentially be taxable. She would also have her CGT annual exemption (currently £10,100) which would probably mop up another chunk of the gain.
But the fact that you paid the mortgage throughout could be useful – there is an argument that this created a trust which, in effect, would mean the house was yours throughout and therefore there should be no capital gains tax to pay. This may well be the pragmatic answer.
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