Evidence of How much have you spent on improvements for CGT

UKSBD

What evidence is required for How much have you spent on improvements with regard CGT?

I bought a derelict property in 1992 for £40k, spent 6 months making it habitable then moved in.

I then moved out in 2013, spent 6 months tidying it up and let it out.

Value of property if I sell is now £280k

I know roughly how to work out Private Residence Relief and Letting Relief but what evidence is required for money spent on improvements to get to my Capital Gain?

Property was completely derelict when I purchased it (basically and empty shell)

I had to reroof it, rewire it, install heating, kitchen, bathroom, windows, re-plaster, relay ground floors, new stairs, floorboards just about everything.

Problem is I never kept any receipts, so only have rough idea on what I spent (approx. £30k)

Will they accept an estimate like this, if not, what do I do as I have no receipts?

UKSBD

00ec25 wrote: »

obviously if you started with a wreck and it isn't a wreck you have evidence of improvement, but how do you propose to support your estimate.

That's the question I am asking.

What evidence do they accept if you haven't got receipts?

Would banks have copies of statements that long back?

Slithery

I think you're out of luck without receipts, you really should have kept them.

theartfullodger

UKSBD wrote: »

.....
Property was completely derelict when I purchased it (basically and empty shell)

I had to reroof it, rewire it, install heating, kitchen, bathroom, windows, re-plaster, relay ground floors, new stairs, floorboards just about everything.

Problem is I never kept any receipts, so only have rough idea on what I spent (approx. £30k).......

Check all bank statements, cheque-book stubs, credit card statements etc etc to get such evidence as you can: And claim those.

Expensive lesson in not bothering to keep records.

Frankly not keeping any records seems unlikely (forgive me...): If I spend £30k on a building I'd at the very least keep invoices so that if the bricks/construction work/new central heating/double-glazing etc etc etc etc failed I'd know who to go after & who to sue in court.

Was any of this "cash in claw" as it was cheaper?? If so, petard, by, hoist...

kinger101

UKSBD wrote: »

What evidence is required for How much have you spent on improvements with regard CGT?

It's either evidence (e.g. documentation) or it isn't (e.g., anecdotes).

You might want to actually do the calculation based on the assumption of the £240K gain before PRR and LR. Remember last 18 months of ownership will also qualify for PRR. You've not posted the exact dates, but potentially, it might not matter (i.e, if taxable gain is under £11,700).

NB - some of the expenditure you've described would be challenged anyway. You'd have difficulty convincing HMRC that a kitchen purchased in 1992 is reflected in the current value of the property.

UKSBD

kinger101 wrote: »

It's either evidence (e.g. documentation) or it isn't (e.g., anecdotes).

You might want to actually do the calculation based on the assumption of the £240K gain before PRR and LR. Remember last 12 months of ownership will also qualify for PRR. You've not posted the exact dates, but potentially, it might not matter (i.e, if taxable gain is under £11,700)..

Yeah, I did a rough calculation and with the relief I shouldn't think it is much (if anything).
Leave it a couple more years though and it may be different, which is why I'm wondering if better to sell now.

kinger101 wrote: »

NB - some of the expenditure you've described would be challenged anyway. You'd have difficulty convincing HMRC that a kitchen purchased in 1992 is reflected in the current value of the property.

I actually revamped it completely again in 2014
new kitchen, bathroom and heating system again (which I do have receipts for) so hopefully I can use those if I do need them.

kinger101

UKSBD wrote: »

Yeah, I did a rough calculation and with the relief I shouldn't think it is much (if anything).
Leave it a couple more years though and it may be different, which is why I'm wondering if better to sell now.



I actually revamped it completely again in 2014
new kitchen, bathroom and heating system again (which I do have receipts for) so hopefully I can use those if I do need them.

IMO, you'll not get to treat these as capital if HMRC start asking questions. At that stage in the ownership, it's just ongoing maintenance.

betsie

They only ask for receipts and proof if they query your claim and investigate. Do you have any pics/ details from when you first bought it to show it is reroofed etc?

sevenhills

UKSBD wrote: »

I bought a derelict property in 1992 for £40k, spent 6 months making it habitable then moved in.

I work PAYE and I have done a little bit of being self employed; tax workings have always been within a year or two.

Are you just declaring tax now, for 1992?

Nobbie1967

I thought CGT was only payable for the period the house was rented out, so the base value would be 2013 and therefore work in 1992 would be irrelevant. Have I got this wrong?

ProDave

When we sold our 2 former BTL's I submitted the details in the form of a spread sheet. That just listed a single figure for the refurbishment cost of each prior to sale. HMRC accepted that figure without question and without asking for any proof.