In respect of point 2, I suspect this could be a sticking point and HMRC may refuse to accept her Beneficial Interest dropped to 25% at that point. It was a verbal agreement at the time, although my SIL does have an open letter from the parents (from 4 years ago) during the dispute confirming that this is what happened. Worst case scenario I guess is that they hold her responsible for 50% of the CGT and she has a greater sum of money to try recover from her ex!
For Point 4, your response has made me understand this much more clearly and it is probably a little more simple than I made it sound. My SIL and her ex originally bought the property as their family home in 1999 - so I guess this is what HMRC would take as the Purchase price. She didn't actually sell any interest to her ex - there was just that verbal agreement that his parents bought 50% and then moved in when they moved out, thereby reducing her beneficial interest to 25%. This 'transaction' took place in 2004. The property was then sold after settlement in August 2017 - so this would be the sale price that HMRC would use.
The Gross gain between 1999 and 2017 is just under £400k....and I did some reading up on the PPR calculation which was really helpful (thank you for the prompt). Their period of ownership was 224 months (Jan 1999 to Aug 2017) and their period of occupation was 70 months (Jan 1999 to Oct 2004) plus the 18 month Final Period Exemption making a total of 88 months. In all, I think this gives rise to a net Capital Gain of £150k - so I guess the issue is then about how much of the tax resulting from that gain is directly payable by her, for her to recover from her ex.
Thanks again for the excellent response