In this section:
- Working out your capital gain or loss - the basics
- How to report a capital gain
- What to do if you’ve made a loss
- Record keeping and Capital Gains Tax
Record keeping and Capital Gains Tax
When you report Capital Gains Tax in your Self Assessment tax return, you'll need to keep certain records and documents to help you fill your tax return in and to answer any queries from HM Revenue & Customs (HMRC). You'll also need these records if you make a claim - for example making a claim for losses.
On this page:
- Records you need to keep for Capital Gains Tax purposes
- When you 'acquire' an asset
- When you own an asset
- When you sell or otherwise 'dispose of' an asset
- Types of documents to keep
- Getting a valuation
- How long to keep records when you sell or 'dispose of' an asset
- What to do if your records are lost or destroyed
- More useful links
Records you need to keep for Capital Gains Tax purposes
The records you should keep depend on your circumstances - but 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:
- work out your capital gain or loss
- fill in your tax return
- make claims - such as a claim for losses
This article explains the typical information you'll need if you sell or otherwise dispose of an asset in the 2008-09 tax year.
When you 'acquire' an asset
You usually acquire an asset when you buy it, but you may also have inherited it, received it as a gift or acquired it in some other way.
In all cases you'll need to keep records of the original cost, additional costs associated with acquiring it and sometimes records showing the value of the asset on a specific date.
Records that show the original cost
If you bought the asset after 31 March 1982 you'll need to keep records showing the original cost of the asset - such as receipts for purchase.
If you didn't buy the asset - for example you inherited or were given the asset - you'll need records of the market value (see below).
Records showing the market value at 31 March 1982
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 and use this in your Capital Gains Tax calculations instead of the your actual costs up to that date. You need to keep any records that will help you do this.
Records showing the market value on a specific date
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 instead of the cost.
For example, if you dispose of an asset left to you in a will by a relative who died on 2 February 2008, you would use the market value on 2 February 2008 (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.)
If you need help getting a valuation for a specific date, please see the section 'Getting a valuation' below.
Records of additional costs
If you spent money acquiring the asset - such as fees paid for professional advice, Stamp Duty, conveyance fees, valuation fees or other costs of transfer - and you're deducting these in your Capital Gains Tax calculation, you'll need to keep records of these costs.
How to calculate capital gains on shares
How to calculate capital gains on property
How to calculate capital gains on personal possessions
How to calculate capital gains on business assets
When you own an asset
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:
Improvement costs
If you've spent money improving the value of your asset you may be able to deduct these costs, as long as the improvement is still reflected in the value of the asset when you dispose of it. For example, if you install a swimming pool to add value to your property - and it's still part of the property when you sell or dispose of it - you can deduct the cost of the swimming pool. Maintenance costs, such as decorating, don't count.
Proving your ownership
If you've spent money proving that you own or have rights over an asset you may be able to deduct this cost.
When you sell or otherwise 'dispose of' an asset
You usually dispose of an asset when you sell it, but you may also have given it away, exchanged it for another asset, transferred it to someone else or it may have been lost or destroyed. These are all examples of a 'disposal'.
In all cases you'll need to keep records of the 'disposal proceeds' (usually the amount you received), additional costs associated with disposing of it and sometimes records showing the value of the asset on a specific date.
Records showing the amount received or 'disposal proceeds'
You must keep records of the amount you received when you sold or otherwise disposed of the asset (this may include, for example, a sum received as compensation for a damaged asset).
Records showing the market value of an asset
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 gave an asset to your son on 5 March 2009, you would use the market value on 5 March 2009 (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.
Records of additional costs
If you spent money selling or otherwise disposing of the asset - such as legal fees, valuation fees or advertising costs to find a buyer - and you're deducting these in your Capital Gains Tax calculation, you'll need to keep records of these costs.
How to calculate capital gains on shares
How to calculate capital gains on property
How to calculate capital gains on personal possessions
How to calculate capital gains on business assets
Types of documents to keep
Typical documents you should keep - sometimes for a very long time - include:
- contracts for buying and selling the asset - eg from solicitors or stockbrokers
- bills, invoices or other records of payments you made when you bought, improved or sold the asset
- copies of valuations
Getting a valuation
If you need to use a valuation - for example if 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 - but 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' (see link below) and send it to your Tax Office. Allow at least two months for HMRC to agree the valuation. If they accept the valuation they will not question it again when you send in your tax return unless there are other relevant facts that you didn't tell them about.
Get form CG34 if you want HMRC to check your valuation of an asset
How long to keep records when you sell or 'dispose of' an asset
If you file your 2009-10 tax return by the filing date, you should normally keep your records until 31 January 2012 - or until 31 January 2016 if you're self-employed or in a partnership.
You'll need to keep your records for longer if you file your tax return
late or HMRC have started a check into your return.
Self-employed - find out more about records you need to keep
Partners in a business partnership and record keeping
Record keeping - general advice for individuals
What to do if your records are lost or destroyed
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 'estimated' (you don't know the actual amount) or 'provisional' (you're waiting for more information).
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.
