CGT relief on renovated house
Discussion
If you were to live in a house, and renovate it during the time you live there - say 3 years - and then subsequently rent it for a period of 3 years, I understand you would be liable for CGT on 18 months of the increase in value over the 6 years. Say the property cost £200k to buy, you spent £40k updating it, and then it sold for £300k.
So the increase in value, less costs, is £60k over 6 years. You would be liable for 18 months of CGT, or £15k.
But my question is that because all the work was done when it was a private residence, how can you prove how much was spent renovating the property? Receipts wouldn't necessarily have been kept, and going back 6 years of bank statements, and picking out what was spent on the property would be almost impossible. As well there could have been cash payments which might not have bank statements or invoices still existing.
So the increase in value, less costs, is £60k over 6 years. You would be liable for 18 months of CGT, or £15k.
But my question is that because all the work was done when it was a private residence, how can you prove how much was spent renovating the property? Receipts wouldn't necessarily have been kept, and going back 6 years of bank statements, and picking out what was spent on the property would be almost impossible. As well there could have been cash payments which might not have bank statements or invoices still existing.
Thanks Eric. Do you know when the time period is being reduced? (April 2020 I think?)
And while I agree that the Enhancement Expenses can be any time during the ownership, the question is how do you prove how much was spent? Or do you self-declare and its taken on trust?
And while I agree that the Enhancement Expenses can be any time during the ownership, the question is how do you prove how much was spent? Or do you self-declare and its taken on trust?
Edited by Condi on Thursday 15th November 12:13
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