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  • FIRST POST
    • UKSBD
    • By UKSBD 12th Apr 18, 7:54 PM
    • 587Posts
    • 187Thanks
    UKSBD
    Evidence of How much have you spent on improvements for CGT
    • #1
    • 12th Apr 18, 7:54 PM
    Evidence of How much have you spent on improvements for CGT 12th Apr 18 at 7:54 PM
    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?
Page 1
    • UKSBD
    • By UKSBD 12th Apr 18, 8:11 PM
    • 587 Posts
    • 187 Thanks
    UKSBD
    • #2
    • 12th Apr 18, 8:11 PM
    • #2
    • 12th Apr 18, 8:11 PM
    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.
    Originally posted by 00ec25
    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
    • By Slithery 12th Apr 18, 8:33 PM
    • 1,058 Posts
    • 1,721 Thanks
    Slithery
    • #3
    • 12th Apr 18, 8:33 PM
    • #3
    • 12th Apr 18, 8:33 PM
    I think you're out of luck without receipts, you really should have kept them.
    • theartfullodger
    • By theartfullodger 12th Apr 18, 8:37 PM
    • 9,997 Posts
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    theartfullodger
    • #4
    • 12th Apr 18, 8:37 PM
    • #4
    • 12th Apr 18, 8:37 PM
    .....
    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).......
    Originally posted by UKSBD
    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
    • By kinger101 12th Apr 18, 9:19 PM
    • 4,491 Posts
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    kinger101
    • #5
    • 12th Apr 18, 9:19 PM
    • #5
    • 12th Apr 18, 9:19 PM
    What evidence is required for How much have you spent on improvements with regard CGT?
    Originally posted by UKSBD
    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.
    Last edited by kinger101; 13-04-2018 at 6:49 PM.
    • UKSBD
    • By UKSBD 12th Apr 18, 10:26 PM
    • 587 Posts
    • 187 Thanks
    UKSBD
    • #6
    • 12th Apr 18, 10:26 PM
    • #6
    • 12th Apr 18, 10:26 PM
    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)..
    Originally posted by kinger101

    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.

    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.
    Originally posted by kinger101
    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
    • By kinger101 13th Apr 18, 12:01 AM
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    kinger101
    • #7
    • 13th Apr 18, 12:01 AM
    • #7
    • 13th Apr 18, 12:01 AM
    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.
    Originally posted by UKSBD
    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
    • By betsie 13th Apr 18, 9:05 AM
    • 425 Posts
    • 418 Thanks
    betsie
    • #8
    • 13th Apr 18, 9:05 AM
    • #8
    • 13th Apr 18, 9:05 AM
    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
    • By sevenhills 13th Apr 18, 9:22 AM
    • 1,842 Posts
    • 703 Thanks
    sevenhills
    • #9
    • 13th Apr 18, 9:22 AM
    • #9
    • 13th Apr 18, 9:22 AM
    I bought a derelict property in 1992 for 40k, spent 6 months making it habitable then moved in.
    Originally posted by UKSBD
    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
    • By Nobbie1967 13th Apr 18, 9:31 AM
    • 813 Posts
    • 886 Thanks
    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
    • By ProDave 13th Apr 18, 9:53 AM
    • 1,126 Posts
    • 1,367 Thanks
    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.
    • ProDave
    • By ProDave 13th Apr 18, 9:56 AM
    • 1,126 Posts
    • 1,367 Thanks
    ProDave
    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?
    Originally posted by Nobbie1967
    Unfortunately yes you have.

    They take the value when you bought it and the value when you sell it and work out the monthly gain. There is no mechanism to even allow for different rates of growth at different times.

    Tax due is based on the monthly rise and how long it was let for, less allowances already mentioned that will reduce how many months of CGT is due.

    Then there is your personal CGT allowance, double that if jointly owned as you are each liable for half the gain.

    I suspect not much CGT will be due.
    • kinger101
    • By kinger101 13th Apr 18, 6:49 PM
    • 4,491 Posts
    • 6,230 Thanks
    kinger101
    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.
    Originally posted by ProDave
    Technically, they didn't query it. It's not the same as accepting it. The onus is on the taxpayer to provide a correct return. You're not expected to present receipts with the return, but you later may need an audit trail of what the expenditure is, and to come up with a reasonable explanation of why you've treated it as capital expenditure.
    Last edited by kinger101; 13-04-2018 at 6:52 PM.
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