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TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15979
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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How can I find out if a Capital Gains tax payment was paid

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How can I find out if a Capital Gains tax payment was paid on a property sale in 1988?

Can you tell me why you want that information please.
Customer: replied 3 years ago.

The tax was supposedly paid without any consultation with me on a property I owned. I have never received any official confirmation of payment to the tax authority.


Can you elaborate on that a lttle please.
Customer: replied 3 years ago.

In 1986 I invested in a Bond which was centred around the property in question - which was sold in 1988. At this time I am trying to regain the proceeds of the investments.. The company (Albany Life Assurance of Potters Bar Hertfordshire) are telling me they have lost my files regarding my investments other than stating payment of Capital Gains were paid with no documents to prove this.


That's a very strange set of circumstances.

Without the Albany file which might have the details of any CGT paid and relevant reference numbers I really think you are going to struggle to get that information from HMRC and even if the Albany file was available, HMRC will have either destroyed paper records that far back or they will be lost in an archive facility somewhere and, given all the changes that HMRC have gone through in the last 20 years, I doubt that anybody at HMRC will have the records of what is there.

If you are in dispute with Albany, then your lawyers should be concentrating on getting you compensation for any loss you feel you have suffered. I doubt that HMRC can type an address into their database to see if any CGT has been paid on it as all they assess are gains, not assets. The tax liability is not linked to an asset directly.

If a tax payment is mis-allocated, it can be difficult to locate but without a payment reference and given the time that has passed, I think you are going to be struggling to get anything useful from HMRC as far back as the late 1980s even if CGT was assessed on you without your knowledge. If it was assessed on Albany, then it will be virtually impossible for you get anything from HMRC.

I'm sorry to have to give you little to go on but unless the Albany file turns up, I really think you are not going to find out if any CGT was paid in the late 1980's.

Let me know if you have any further questions.

Customer: replied 3 years ago.

Thank you for your candid reply, from which it would appear the answer regarding payment must come from Albany.

Could you put forward a question or questions for Albany to answer? Putting the onus on them to show proof of payment?

There is no magic question I could come up with. I would certainly need much more information as to the sequence of events before I decided how to act.

I guess it depends how much money you want to throw at this and how much is at stake. If Albany say CGT was paid, I would ask them how they can be sure in the absence of their file. Depending on their answer, I would then consider instructing lawyers to get a court order which tells Albany to give you access to paper and computer records and/or to haul a high ranking company official into court where he or she will be at risk of a perjury charge if he or she doesn't answer truthfully any questions you may have on this matter.

My ultimate goal would be to get Albany to make a financial offer that I would be happy with. If you haven't done so, you should write to HMRC's head office in central London, explain your predicament and ask if there is anything that HMRC can do.

Hi again.
It's been a few days since I answered your question. Is there anything you need further clarification on?
Customer: replied 3 years ago.

I am sorry for the late reply. I have been out of the country on business. I will complete your performance chart. I do have a further question. How much Capital gains Tax would have been paid on £300,000 in 1988?

Leave that with me for a little while and I'll get back to you.
The circumstances of the property being connected with a bond make this a little uncertain but I shall give you figures as if you owned the property outside of a bond arrangement.

Between March 1982 and March 1998, indexation allowance was used to reduce gains. This was an inflation allowance. The rates are here. The rate applied was determined by the purchase and disposal dates. As I don't know the purchase date or the disposal date I'll leave indexation allowance out.

Another complication is the date of disposal as the CGT regime changed between 1987/88 (6 April 1987 to 5 April 1988) and 1988/89 (6 April 1988 to 5 April 1989) as you will read here. Prior to 1988/89, the CGT rate was a flat 30%. From 1988/89, the taxable gain was added to income and charged at the income tax rates applying. In 1988/89, the income tax rates were 25% and 40% so the highest the CGT could be charged at was 40%. The date of exchange of contracts is the critical date for CGT in most property transaction cases.

If the disposal occurred in 1987/88, the first £6,600 of the gain would have been exempt. The balance would have been charged to CGT at 30% so on a gain of £300,000, the CGT charge would be £88,020 (£300,000 - £6,600 x 30%).

If the disposal occurred in 1988/89, the first £5,000 of the gain would have been exempt. The balance would have been charged to CGT at 25% and 40% but if we assume your income exceeded the 25% tax band and use 40%, the CGT charge would be £118,000 (£300,000 - £5,000 x 40%).

As I said above, I have ignored indexation allowance which would reduce the taxable gain.
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