Xbox gamertag and inactive account update

Once a gamertag is acquired MS will not release the gamertag until that account has been completely inactive with anything to do with MS not just the xbox for 5 years from the last date that it was used. Keep in mind even if it may seem like a gamertag
is inactive on the xbox console that does not mean that the MS account associated with that gamertag is not being used in something else associated with MS.

Microsoft have recently updated their terms and it is now 2 years of inactivity and they will shut down the account.

Adding to this, just because it is inactive on Xbox, does not mean that the Microsoft account is inactive. As long as they keep using the account, then the gamertag will stay attached.

An account has to be inactive for two years now, before the account is closed.

Yup. This article covers a lot of the changes. They're pretty big, but there are a lot of little caveats that
might keep accounts active.

@Naturallity Is there something in specific you're worried about in regards to this change?

like all the inactive accounts the gamertag on them will be avaible

As long as they are completely inactive across all Microsoft products and services. If they are in use still on anything else, like outlook, email, office etc then they will stay attached to that account.

As of 30th of August, if I recall correctly

They are also phasing in a new gamertag system, so you will be able to have whatever you want (as long as it's within the code of conduct)