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Sam
Sam, Accountant
Category: Tax
Satisfied Customers: 13657
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
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i lived in my property 20 years ago when i was eighteen for

Customer Question

i lived in my property 20 years ago when i was eighteen for 17 months i then met my partner and moved in with him.i rented mine until 2006.i then sold my house to buy one with my partner.i am being asked to pay capital gains of 22500 i am very stressed about this and have no where near that sort of money can you help me.
i have a enforcement letter and am worried about repossesion of our house
Submitted: 2 years ago.
Category: Tax
Expert:  Sam replied 2 years ago.
Hi

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

I am sorry to hear of the difficulties that you are having, might I ask why you need proof of address, are HMRC not accepting that you lived here for 17 months back 20 years ago?
Did you live here alone or with parents?
Did you have a mortgage
When was the property sold
Did you declare all rental income to HMRC

if you can give me a little more background information, about this property, how it came to be yours etc then I can advise further.

Thanks

Sam
Customer: replied 2 years ago.


I bought the property with a mortgage in my sole name. I lived in the property by myself. I have very little documentation as it was so long ago. I sold the property in 2006. I did not declare any rental income, to be honest i didnt even know i had to! It was empty for a period of time when i had some renovations completed & on occasions i moved back for a month or two. I also had a few tenants that never paid & it took months to evict them. This investigation has been going on for many years & ive always tried to comply and provide evidence the latter being a utility bill which was in my name dating back to early 2000 however they have not accepted this. Ive tried in vain to obtain more evidence however records do not seem to go back that far!

Expert:  Sam replied 2 years ago.
Hi

Thanks for your response

The mortgage company will have records of the fact that you made this purchase and that you bought with the intent of living there - so this would be a good place to start - then you would have been put on the electoral role, as the property owner - even if you did not complete registration forms or vote. So that would show an initial position of having lived there.

But there will be a capital gain as there was a period of more than 36 months when it was not your main residence, until such time that the property was sold. And you also are due lettings relief, as this was once your main residence and you then let it out.
Plus the costs to buy and sell (such as legal fees and estate agent fees) and the costs of any capital improvements, such as new bathroom, new kitchen etc

But then there is also the issue of the rental income which will need declaring - from which you can deduct the interest elements of the mortgage repayment, insurance and any repairs, key cutting etc plus the costs to evict the tenants.

My only concern is that you state this has been under enquiry with HMRC for some time - and whilst you do not indicate that you have consulted an accountant to represent you in this matter, whether there is stills cope to argue this figure and get HMRC to amend any element of what they ask for, at this late stage of the process, remains to be seen, But taking an initial consultant, and having someone represent you, will be worth the cost, as they may have scope to argue the figures HMRC have drawn up,(if there is time to do this) and also argue the time that you lived there with the new evidence, which will take a weight off your shoulders, and allow the accountant to get the best outcome for you, with very little work involved. (which also means little cost)
But the water bill, if in your name is proof that you were the one that paid the bill, and this along with mortgage information from the lender and you probably had insurance linked to the property (buildings and contents) which may have been linked to the mortgage lender - which further shows you had contents insured - that clearly would have been yours.
Have you any old letters from family/friends or employers, or been in touch with the doctors or dentist that would further support this address having been yours for a set time ? (most doctor surgery's still operate old paper records - which show old details on them)
Who did you work for, back then, was it the same employer as now. or one that you could get in touch with, to look through a personnel file? These are just a few suggestions - and I am sure something would come of it.

And I would get onto this today - find a local accountant to you that is familiar with
1) Capital gains on property
2) Private residence relief
3) Private Lettings relief
4) Rental income
5) Investigation cases

Then contact HMRC to advise that you are taking representation, and would appreciate them putting the matter on hold, until the evidence to argue this figure has been gathered and presented to HMRC.

If, in the meantime you need any more advise then do come back to Just Answer - and if you have any follow up questions in the meantime then please do ask, to see if we can help better your position.

Thanks

Sam




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