Film, Media & TV1 min ago
Capital Gains Tax Query
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I sold a property approximately 3yrs ago and the sale price was 115k , the purchase price was 30k. However at the time of the sale thier was some property repairs outstanding and the buyer insisted 10k to be with held from the sale price and held in a trust account until the expenditures had been completed , at the time it was not known how much or when this expenditure would be completed. When calculating the CGT at the time of sale this 10k retention was excluded from the proceeds. now three years later I have got back 4k meaning 6k of expenditure occurred.my questions 1. how do i account for the CGT ..should i put it in the cGT part of the SA and pay the full tax and i can i use this years CGT allowance against it , can i use indexation allowance ? or my preferred option just forget about it and hope the tax man never catches up with me - although he always seems to get me..Thxs any help gratefully appreciated.
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For more on marking an answer as the "Best Answer", please visit our FAQ.You need a tax adviser to answer this one but logically you could argue that so long as the retention was a true cost at the time and could not have been included as profit, it should not have been taxed but carried forward. The question however is whether the money retrieved is a gain or income?! If income you need to add it to your taxable income for this year. The reason it may not be a gain is that it is not an asset that has been disposed of. As it could not be calculated for gains purposes it would not fall into a black hole but must be accounted for somewhere, most logically as income. Sorry to add to your problem!