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Where Taxpayers and Advisers Meet

CGT on sale of holiday home

pandora_boite
Posts:23
Joined:Thu Nov 24, 2011 6:51 pm
CGT on sale of holiday home

Postby pandora_boite » Fri Jul 30, 2021 1:21 pm

I bought a old farmhouse as a holiday home 25 years ago. I spent money on renovating it and on adding an extension, all with the required planning permissions.

I am now planning on selling it, but don't know how to calculate capital gains. At the time I did the renovation I was not thinking of the future sales issues. I no longer have the bank statements or receipts from all those years ago.

Can someone please advise me on how should I go about calculating the capital gains when I sell this property.

Jholm
Posts:360
Joined:Mon Mar 11, 2019 4:22 pm

Re: CGT on sale of holiday home

Postby Jholm » Fri Jul 30, 2021 2:02 pm

You can claim the costs without receipts but just be aware that if HMRC ask for evidence, you might struggle to substantiate. It would be expected that you have incurred some costs though anyway.

Did it ever become your main residence at any point or has it been a second home throughout?

In it's simplest form, without claiming any reliefs, the gain will be the sale proceeds, less sale costs (eg. agent/legal fees), less renovation costs, less purchase price (and acuqisition costs).

Then deduct your annual exemption of £12,000, any b/f losses and the CGT is charged at 18%/28%.

If you own it jointly, your share would be declared in line with ownership.

pandora_boite
Posts:23
Joined:Thu Nov 24, 2011 6:51 pm

Re: CGT on sale of holiday home

Postby pandora_boite » Sat Jul 31, 2021 3:02 pm

Thanks for the response.

It was my principle residence for 3 years, and no it is not jointly owned.

Although I don't have bank statements and receipts, I do have numerous photographs of the house before, during and after the renovation. Is there some official way to allocate renovation costs based on these photos (eg by having a surveyor/estate agent give an estimate. Would that be acceptable if HMRC wanted some substantiation.

I can't believe that my circumstances are rare, I would imagine this happens a lot with properties that are held for a long time, so I would hope that there would be some official way to allocate costs. The problem is, that this was quite a major and expensive renovation, so I would like fair costs allocated.

pawncob
Posts:5090
Joined:Wed Aug 06, 2008 4:06 pm
Location:West Sussex

Re: CGT on sale of holiday home

Postby pawncob » Sun Aug 01, 2021 9:44 am

You could submit a CGT computation and have it referred to VOA for a post improvement valuation.
https://www.gov.uk/hmrc-internal-manuals/capital-gains-manual/cg74000
With a pinch of salt take what I say, but don't exceed your RDA


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