I bought a property in May 1979 and worked there as self-employed until January 1987. I rented it out, and it has been rented since then. I believe the property would have been valued at £40,000 in 1985. At present, it is rented out and is valued at £300,000. What capital gains tax (CGT) will I have to pay, and is any relief available as it was used as an owner-occupied business for some time? 

Arthur Weller replies:  

Firstly, it is the March 1982 value that is important, not the 1985 value. Let's say it was worth £30,000 in 1982. If it is sold today for £300,000, your capital gain will be (£300,000 - £30,000) = £270,000. For just over 40 years, between March 1982 and now, this equates to an approximate capital gain of £6,750 per year. It is not clear what kind of business use you occupied the house for. Let us make an assumption (rightly or wrongly) that your business use did not prejudice your principal private residence (PPR) relief. If so, you are eligible for PPR relief for the first 58 months you lived there (i.e., April 1982 to January 1987) (see HMRC’s Capital Gains manual at CG64940) plus the last nine months of ownership, called the final period exemption (i.e., 21 December to 22 August = 67 months). At a rate of £6,750 per year, you are eligible for PPR relief of £37,688 for 67 months. That means your chargeable capital gain is £270,000 - £37,688 = £232,312.