CGT on 2nd property.

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  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    POPPYOSCAR wrote: »
    The sale of the property is now going ahead.

    If we complete by say end of november am I right in thinking that the CGT will not have to declared until the tax return 17-18 and paid when that return is due i.e. end January 2019?


    That would be correct.
  • settingsun
    settingsun Posts: 19 Forumite
    I have a very similar stuation to the OP, except I have not sold yet and did not purchase till about 10 years later. The CGT I worked out is about 40k if I sold now. For the time being I have assumed I can claim for major works I did in the first 10 years I lived there (3 new bathrooms, and a kitchen, roof, painting, garden walls, boiler, Drive) This all comes to about 40k but I dont think I can find any of the receipts from 20 years ago. I have videos of the kids doing a running documentary but I dont have the paperwork!

    Presumably the HMRC are not going to take my word for it! Seems a naive question now I put it in writing, but it makes a difference of about 15k so thought I would see what you guys thought.

    thanks.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    edited 30 October 2017 at 9:41PM
    settingsun wrote: »
    I have a very similar stuation to the OP, except I have not sold yet and did not purchase till about 10 years later. The CGT I worked out is about 40k if I sold now. For the time being I have assumed I can claim for major works I did in the first 10 years I lived there (3 new bathrooms, and a kitchen, roof, painting, garden walls, boiler, Drive) This all comes to about 40k but I dont think I can find any of the receipts from 20 years ago. I have videos of the kids doing a running documentary but I dont have the paperwork!

    Presumably the HMRC are not going to take my word for it! Seems a naive question now I put it in writing, but it makes a difference of about 15k so thought I would see what you guys thought.

    thanks.
    obviously you are expected to be able to support the cost you claim with paperwork if challenged,
    have a read of Tobias Ridpath v HMRC (2013): " The Appellant could not provide any precise evidence about the expenditure incurred."
    http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02785.html
    (of course if you have an "ordinary" name it is less likely HMRC will take you to "court" :D )

    I'd also question whether all of that work was genuinely capital improvements? like for like replacement is revenue, not capital. Would you care to elaborate on the exact extent of the works?
  • POPPYOSCAR
    POPPYOSCAR Posts: 14,897 Forumite
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    00ec25 wrote: »
    obviously you are expected to be able to support the cost you claim with paperwork if challenged,
    have a read of Tobias Ridpath v HMRC (2013): " The Appellant could not provide any precise evidence about the expenditure incurred."
    http://www.bailii.org/uk/cases/UKFTT/TC/2013/TC02785.html
    (of course if you have an "ordinary" name it is less likely HMRC will take you to "court" :D )

    I'd also question whether all of that work was genuinely capital improvements? like for like replacement is revenue, not capital. Would you care to elaborate on the exact extent of the works?

    If I understand correctly in the case quoted it would appear that he did not declare the CGT and was found out by HMRC. Stands to reason they would look into things in more detail I would of thought?

    Would HMRC take such an interest on modest expenditure on a large gain?
  • Keep_pedalling
    Keep_pedalling Posts: 16,615 Forumite
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    settingsun wrote: »
    I have a very similar stuation to the OP, except I have not sold yet and did not purchase till about 10 years later. The CGT I worked out is about 40k if I sold now. For the time being I have assumed I can claim for major works I did in the first 10 years I lived there (3 new bathrooms, and a kitchen, roof, painting, garden walls, boiler, Drive) This all comes to about 40k but I dont think I can find any of the receipts from 20 years ago. I have videos of the kids doing a running documentary but I dont have the paperwork!

    Presumably the HMRC are not going to take my word for it! Seems a naive question now I put it in writing, but it makes a difference of about 15k so thought I would see what you guys thought.

    thanks.

    Adding new bathrooms would be considered improvements, but replacement boilers driveways wall, roof repairs and painting would not be.
  • settingsun
    settingsun Posts: 19 Forumite
    00ec25 wrote: »
    I'd also question whether all of that work was genuinely capital improvements? like for like replacement is revenue, not capital. Would you care to elaborate on the exact extent of the works?

    What happened was that the house we moved into had been extended but it was essentially unfinished and we had to do a lot of work over the 12 years we lived there. There was a leaking roof and leaking gutters, drive which you could not park on, a garden wall made of rubble. Then the bathrooms and kitchens needing fitting. We then moved and failed to sell it and went down the btl route. Since then we have treated all the maintenance as an expense e.g. painting and new shed.

    We probably have some more bathrooms to redo soon after 23 years.

    Could be all academic as I can't find the paperwork.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    POPPYOSCAR wrote: »
    If I understand correctly in the case quoted it would appear that he did not declare the CGT and was found out by HMRC. Stands to reason they would look into things in more detail I would of thought?

    Would HMRC take such an interest on modest expenditure on a large gain?
    whether "you" are picked on for a "detailed" examination does not later the fact the law says when making a self assessment tax return "you" are supposed to have the evidence to support it.

    feel free to search for other more specific cases if you want to better scope your tax evasion "opportunity"
  • POPPYOSCAR
    POPPYOSCAR Posts: 14,897 Forumite
    First Anniversary Name Dropper First Post
    00ec25 wrote: »
    whether "you" are picked on for a "detailed" examination does not later the fact the law says when making a self assessment tax return "you" are supposed to have the evidence to support it.

    feel free to search for other more specific cases if you want to better scope your tax evasion "opportunity"


    What are you on about?
  • Keep_pedalling
    Keep_pedalling Posts: 16,615 Forumite
    First Anniversary First Post Name Dropper Photogenic
    settingsun wrote: »
    What happened was that the house we moved into had been extended but it was essentially unfinished and we had to do a lot of work over the 12 years we lived there. There was a leaking roof and leaking gutters, drive which you could not park on, a garden wall made of rubble. Then the bathrooms and kitchens needing fitting. We then moved and failed to sell it and went down the btl route. Since then we have treated all the maintenance as an expense e.g. painting and new shed.

    We probably have some more bathrooms to redo soon after 23 years.

    Could be all academic as I can't find the paperwork.

    You should be able to offset the cost of fitting out the empty shell of the bathrooms and kitchen, but fixing a leaking leaking roof is general maintenance, and you can't claim for garden features like walls and sheds.

    Any work you did while renting out should have been treated as an expense against income so can't be claimed again to offset CGT.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    POPPYOSCAR wrote: »
    Would HMRC take such an interest on modest expenditure on a large gain?
    POPPYOSCAR wrote: »
    What are you on about?
    your response reads that you think the case I quoted relates to the exact circumstances of that case. Your follow up comment implies that you therefore think HMRC won't (can't?) apply the basic principle because the amount involved is too small

    whilst I suspect you accept that the principle (tax claims must be supported) is clear, you also seem to be asking if there is anything more specific to evidence that, hence go find it yourself if you are looking for ways to avoid tax by submitting unsupported claims
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