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  • Tax

    Capital gains and record keeping

    I am curious as to how long we are actually supposed to keep receipts/ records for.  I reckoned on 6 years for rental income but for CGT it must surely be for entire period of ownership, even if it's 50 years?

    Just before Christmas, my wife and I received matching brown envelopes announcing that HMRC had opened investigations into us.  As a part of the enquiry, I had to provide schedules of all of our claimed capital enhancement expenditure for 2 particular properties we had disposed of. As I had been completely hands on for the considerable enlargement of both of these and both had expenditure in the hundreds of thousands of pounds broken down into thousands of receipts, this was a major exercise.  Luckily I have always kept really detailed records and was able to provide everything required to satisfy this part of the investigation, but this still took entire days of my time, including Christmas Day and Boxing Day.  The detail required needed to go back 16 years and there would have been no way around this.

    Is it the case that record keeping and receipts could in fact need to be kept for several decades?  I know other landlords who seemed rather shocked by what I had to provide.

    On another note, I had NLA tax investigation insurance, but only I am a member, not my wife, so this wouldn't have covered her.  This was a bit of a blow,  I couldn't see how only having insurance for one of us would have benefitted me particularly so I chose not to use the insurance and to do everything myself.   Just a heads up to anyone who might find themselves in the same position!

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    James, the answer is for another £20 odd quid a year, - take Family membership. - but a valid and interesting point you make. Of course for Capital improvements ( CGT ) you have to retain receipts until you sell, which yes, could be 50 years.

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