Q&A – Help! We have lost our receipts!

Capital Gains Tax » August 13, 2021

Each week we receive numerous enquiries from clients which are usually quite quick to answer.  Over the coming weeks, we will be publishing some of the questions received and our answers to them.  Please note we have changed some parts of the questions to protect our client’s information.

Q:  We are getting in touch because we are going through a divorce and are going to sell one of our investment properties.  We bought it over 15 years ago and we have spent roughly £50-60k on improving the property over the years (with new bathrooms, adding decking to the gardens, roof replacement, etc). The problem is we haven’t kept any of the receipts.  I think if we looked really hard we could find maybe 20% of the receipts.  Will the expenses we claim be limited to £10k?

A:  When you sell a property the gain is worked out by taking the sales price less all allowable expenses.  These include the purchase price, costs of sale, costs of acquisition etc. Capital improvements to a property are also allowable expenses.   When you submit your tax return to HMRC, they will not ask for any proof at that time. However, you are required to have proof of the work undertaken for all capital expenses claimed.  If you no longer have invoices or receipts, you may need to look at other ways to prove the work was undertaken. For example, before and after photos of the work (this might be evidenced through estate agents before the property was bought and photos now).  Are there bank statements that show the expenses? You should also consider reaching out to the people who undertook the work to ask if they can re-issue your invoices.

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