CGT record keeping

18th September 2018

The annual Capital Gains Tax (CGT) exemption for individuals is £11,700 for 2018-19. A husband and wife each benefit from a separate exemption. Same-sex couples who acquire a legal status as civil partners are treated in the same way as married couples for CGT purposes.

CGT is normally charged at a simple flat rate of 20% and this applies to most chargeable gains made by individuals. If taxpayers only pay basic rate tax and make a small capital gain, they may only be subject to a reduced rate of 10%. Once the total of taxable income and gains exceed the higher rate threshold, the excess will be subject to 20% CGT. A higher rate of CGT applies (18% and 28%) to gains on the disposal of residential property (apart from a principal private residence).

It is important that any individuals keep proper records of any capital gains for at least a year after the Self- Assessment deadline. They may need to keep records for longer, if the tax return was submitted late or HMRC has started a check into the return. Businesses must keep records for 5 years after the deadline.

HMRC suggests that taxpayers keep receipts, bills and invoices that show the date and the amount:

  • paid for an asset,
  • of any additional costs such as fees for professional advice, Stamp Duty, improvement costs, or to establish the market value,
  • received for the asset - including payments made by instalments, or compensation if the asset was damaged

It is also recommended to keep any contracts for buying and selling the asset (for example from solicitors or stockbrokers) and copies of any valuations. If records are no longer available for any reason, you must try and recreate them letting HMRC know if the figures are estimated or provisional.

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