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bigduckontax
bigduckontax, Accountant
Category: Tax
Satisfied Customers: 4094
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I will be selling a renovation property soon which be subject

Customer Question

I will be selling a renovation property soon which be subject to CGT on the profit i have made.
When I file my tax return, how much detail do I need to give regarding refurbishment costs?
I have paid out for work that has not been and other work has been done but I have no receipts for.
Submitted: 3 years ago.
Category: Tax
Expert:  bigduckontax replied 3 years ago.
Hello, I'm Keith and happy to help you with your question.
One should always retain receipts, invoices etc for work done on a property. If there are none than keep a written record of the expenditure to support your position in the event of a possible HMRC investigation at some future, indeterminable date. By refurbishment costs you have to be a tad careful. Improvements and enhancements come into the CGT computation whilst mere maintenance is a cost against any rents or other income derived from the property.
To calculate the gain for CGT take the acquisition price plus costs and add the enhancement expenditure. From the selling price deduct the costs of sale. Take one from the other and the balance is the gain for CGT. From this can be deducted your Annual Exempt Allowance of 11K and maybe Lettings Relief (LR) also. The rules for LR are complex, but basically if you have let the property out at any time and also lived in it yourself too for a period of your ownership then LR is a valuable concession, up to 40K. Your own occupation of the premises as your sole or main domestic residence could reduce CGT also, in proportion to total ownership. I suspect from the tenor your question that this is, not the case.
I do hope I have helped you with what can be a very complex tax.
In any event any gain made after allowances is taxable at 18% or 28% or a combination of the two rates depending on yout income including the gain in the year of sale.
bigduckontax and other Tax Specialists are ready to help you
Expert:  bigduckontax replied 3 years ago.
Thank you for your support.