My husband/wife clients are a partnership who have, until recently, run a nursery from a property which was their main home until 2013. As the business expanded, more and more of the property was given over to the nursery business, until it became unfeasible for my clients to continue living in the property. They applied to the council for change of use from residential to business premises and from that time until the business closed, the property was used solely for business purposes.
My clients did not purchase another property to live in but rented a property nearby.
The business ceased last year, and the property is about to be sold. I assume that there would be a capital gains tax implication given that the property has been used partly for business purposes for many years, and solely for business for the past 5 years. However my clients have been told by another accountant that there is no capital gain because the property is their only property, so is exempt. Surely, because they have used it for business purposes for much of the period of ownership, this is not correct?
I understand that Private Residence Relief would be available for at least some of the period in which my clients lived in the property, although would expect an adjustment to be made because the home was partly used for business during this time. I would also expect no private residence relief to be available after 2013 when my clients moved out and the property was solely used for business purposes.
Am I missing something incredibly simple?