Missing Invoices

Missing Invoices

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A widow (76) has been told she needs to submit a self assessment tax return to 5th April 2014, now that she receives a UK state pension in addition to her Irish state pension. Her husband passed away in Feb 2013 and thats why the widow now receives a UK state pension.  Combined with her Irish state pension she is just over the personal allowance threshold. She is UK resident. Easy enough to do.

However her husband kept 3 cattle on his farm and had done so for years. He would sell them each year and buy 3 new ones, fatten them and sell them following year. It was a loss making operation and was more of a hobby. However when he died he had five cows on the farm which the widow inherited. She sold them in Sept and Oct 2013. She has the sale invoices but has no record of the purchase price of any of them or when or where they were bought. The cousin that would assist on the farm died of a heart attack in Nov 2013 - he was the one who actually went to the mart to buy them.  

Long story short - any advice on a reasonable way to estimate the prices?

I thought I would just take the average sales prices from the Department of Agriculture and Rural Developments Northern Ireland Agricultural Market Report covering the estimated purchase time frame.

I suppose she could phone all the local marts with herd numbers and hope that they can find the original sales prices but I think thats a lot of effort for something that is not going to result in a material difference between the estimate and what was paid and is going to most likely result in a loss anyway. 

Replies (5)

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James Reeves
By James Reeves
11th Dec 2014 17:28

Why?

Surely not a trade and therefore not taxable as a trade, and presumably well below any CGT reporting limit and exemption?

On what basis were you thinking of including it?

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By The Grammar Police
11th Dec 2014 17:35

Why?

If it was a trade the appropriate value would be at D.o.D. (Too much to hope for a probate value?)

I would just ignore the whole thing.

 

Were final accounts prepared for the husband? Or was it deemed a hobby?

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By andy.partridge
11th Dec 2014 17:41

How much are we talking about?

If it is trivial I would consider disclosing as a break-even activity and justifying it in the white space.

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By exceljockey
11th Dec 2014 20:17

I was thinking of including it

as reading the advice on the HMRC site re hobbies etc the the animals were sold for 'profit' but after feed, vets bills etc there was no profit or very little. The five cattle were sold for approximately £4600 (in total). A reasonable purchase price would be £2900 (again in total) and then there are the feed costs, vet bills, use of home etc.

No final accounts for the husband. I assume it was a hobby as he had been doing it for years and never had to submit a return. I believe some one in an agricultural position said that she would need to submit a tax return now that the herd number was in her name. 

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By The Grammar Police
11th Dec 2014 20:48

It's not trading, she was merely disposing of assets she inherited from her husband, and as such it's not taxable under Schedule "D" and under any potential threshold for CGT. If there's no "profit" I would ignore it. Having a herd number doesn't mean that you're in business, it's a necessity if you want to sell cattle.

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