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You'll need to keep records so that you can work out if you have made capital gains. These records will help you fill in your tax return and answer any queries from HM Revenue & Customs (HMRC). You'll also need these records if you make a claim or election - for example, a claim for losses.
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The records you should keep depend on your circumstances. It's a good idea to keep any records associated with an asset you've owned.
You should always keep any information that you use to:
You usually acquire an asset when you buy it. You may also have inherited it, received it as a gift or acquired it in some other way.
You'll always need to keep records of the original cost and additional costs associated with acquiring the asset.
Sometimes you'll need records showing the value of the asset on a specific date, see the example below.
If you bought the asset after 31 March 1982 you'll need to keep records showing the original cost of the asset. This might be a receipt for purchase.
If you didn't buy the asset, - you may need records of the market value (see below). This could apply if, for example, you inherited the asset or received it as a gift.
If you owned the asset on 31 March 1982, you'll need to work out the market value of the asset at 31 March 1982. You will use this in your Capital Gains Tax calculations instead of your actual costs up to that date. You need to keep any records that will help you do this.
There are other times when you need to use the market value of the asset on a specific date in your Capital Gains Tax calculations.
For example, you dispose of an asset left to you in a will by a relative. The relative died on 2 February 2013. You use the market value on 2 February 2013 (the date of death) in place of any actual cost in your calculations.
Use the links to the calculation guides below to find out more about when to use the market value.
For help getting a valuation for a specific date, please see the section 'Getting a valuation' below.
You need to keep records of money you spent acquiring the asset so that you can deduct these costs in your Capital Gains Tax calculation. These costs might include
You may be able to deduct some additional costs in your Capital Gains Tax calculation that you've had during the time you've owned the asset. You'll need to keep records of these costs. Some examples are:
If you've spent money improving the value of your asset you may be able to deduct these costs. You can do so if the improvement is still reflected in the value of the asset when you dispose of it. For example, you install a swimming pool to add value to your property. It's still part of the property when you sell or dispose of it, so you can deduct the cost of the swimming pool. Maintenance costs, such as decorating, don't count.
If you've spent money proving that you own the asset you may be able to deduct this cost.
You usually dispose of an asset when any of the following happen:
These are all examples of a 'disposal'.
You need to keep records of the 'disposal proceeds' (usually the amount you received) and additional costs associated with disposing of the asset.
You will sometimes need to keep records showing the value of the asset on a specific date.
You must keep records of the total amount you are due to receive when you dispose of an asset. This could include, for example, compensation for a damaged asset or money you actually receive later, such as payments by instalments.
You'll sometimes need to use the market value of the asset on the date you dispose of it, instead of the amount you received.
For example, if you give an asset to your child, you use the market value on the date of the gift instead of any amount received. (Use the links to the calculation guides below to find out more about when to use the market value.)
If you need help getting a valuation for a specific date, please see the section 'Getting a valuation' below.
If there were costs that were for the disposal of the asset you may be able to deduct these in your Capital Gains Tax calculation. This might include legal fees, valuation fees or advertising costs to find a buyer.
Documents you should keep - sometimes for a very long time - include:
You may need to use a valuation. For example, you inherited or were given an asset or if you owned the asset on 31 March 1982. You may decide to seek professional advice or to provide your own valuation. You may find material from websites, the library or the Stock Exchange helpful. You must keep records of how you arrived at your valuation.
You can ask HMRC to check your valuation. You may do this after you have disposed of the asset and before you send in your tax return. You'll need to complete form CG34 Post Transaction Valuation Check and send it to the address shown on the form. Allow at least 2 months for HMRC to agree the valuation. If they accept the valuation they will not usually question it again when you send in your tax return. But they may question it if there are other relevant facts that you didn't tell them about.
If you send your 2013-14 tax return by 31 January 2015, you should normally keep your records until 31 January 2016. You should keep them until 31 January 2020 if you're self-employed or in a partnership.
You'll need to keep your records for longer if you send your tax return late or HMRC have started a check into your return.
If you lose any records and can't replace them, you must tell HMRC when reporting your gains or losses. You'll have to do your best to recreate the records you need.
When you fill in your tax return you should tell HMRC that the records have been lost or destroyed. You do this by clearly showing on your tax return whether the figures are:
If you use estimated figures, you must tell HMRC if you want these figures to be accepted as the final figures.
If you use provisional figures, you'll need to tell HMRC what the actual figures are as soon as you can.