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Another problem

CGT help ??

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I posted this on Sunday but it's vanished so here it is again

In 2000 the client's husband developed an empty shop into 4 flats

2004 as part of a divorce settlement he put 2 flats into the wife's name

2005 she sold one and "paid the CGT"

FEB 2018 she sold the 2nd and I am trying to establish the CGT profit

Now the problems regarding establishing the cost

The client has no information except her memory, which is patchy and unreliable

The ex- husband is dead

The accountant who prepared the 2015-16 ax return is dead and she has had 2 more accountants since then before me

The solicitors can't locate the divorce agreement

Faced with the above I turn to the combined knowledge of AWeB members to advise on how I establish the flat's cost 

Replies (17)

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By ireallyshouldknowthisbut
04th Jun 2018 10:29

What is on the land registry?

Failing that you will have to guess based on market values of similar sold property and price trends in the area, but I would always suggest to the client they instruct a surveyor, so if your valuation is a bit iffy you are not in the brown stuff.

Thanks (1)
Hallerud at Easter
04th Jun 2018 10:33

Would Land Register have any details, perhaps, from 2000/2004/2005?

Would HMRC have anything from the 2005 sale, if all flats are similar the base cost might assist?

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By bernard michael
04th Jun 2018 10:47

I checked the land Registry but it was no help & as for HMRC
you would have thought I was after the Crown Jewels
I think the surveyor idea is good if I can find one that isn't charging an arm & a leg

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By SteLacca
04th Jun 2018 11:10

Aren't you worried that everyone associated with these gains apart from her seems to wind up dead?

Thanks (6)
By bernard michael
04th Jun 2018 11:23

I aim to be the last man standing

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By lesley.barnes
04th Jun 2018 11:59

Would the client be able to get a copy of her divorce from the court that dealt with it? I don't know what sort of detail there would be.

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By K81
04th Jun 2018 13:05

can you get a copy of the 2005 tax return from HMRC, I assume the costs of the flat sold then would be similar to the flat sold now.

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By Marion Hayes
04th Jun 2018 16:12

What is the link to 2015/16?
Her 2005 tax return is unlikely to be accessible as it is so long ago.
I would take 2 steps before incurring extra costs.
I would look at the Land Registry for the other flat to see if it has been resold more recently so that you can compare the two properties current values.
I would write to the District Valuer's office to see if they hold any correspondence relating to the Tax Return and it's agreed valuation. She must have ticked at least 1 of the boxes saying there was a valuation to be agreed.
Finally, I would ask the Collector how much the tax payment was in January 2006 and how much related to CGT.
These are all peripheral to the tax systems but are not archived so rigorously.

Thanks (1)
By bernard michael
05th Jun 2018 11:19

Thanks everybody - the search continues

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By birdman
11th Jun 2018 11:04

Put the address in Rightmove, which gives transaction amounts and dates for all properties in the area. At least you should get the selling price for the 2005 sale which is a start!

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By A Sukkar
11th Jun 2018 11:33

How the husband paid for the flat, bank , building societies, mortgage, she was the wife she must know when and how he paid for the purchase.

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By A Sukkar
11th Jun 2018 17:26

How the husband paid for the flat, bank , building societies, mortgage, you were the wife you should know when and how he paid for the purchase.

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By bernard michael
11th Jun 2018 14:18

"My husband dealt with all the financial matters"
An old style marriage

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By whitevanman
11th Jun 2018 19:24

Rather like the questioner, I posted this earlier but it seems to have vanished! So here goes again.
You first need to decide what it is that you actually need - costs or valuation - and if the latter, at what date.
The special rules for transfers between spouses cease to apply from the end of the tax year in which they permanently separate. One would usually expect that to happen sometime before the divorce is "settled" in court.
So, quite possibly, when the client acquired the properties in 2004, it was a transaction to which Open Market Value should have applied and the ex- husband's costs etc would be irrelevant. You really need accurate information to determine the point.
Assuming it is a case of OMV, you can establish this by researching sales of similar properties, in the same area at the same time (and to some extent the disposal made in 2005 may provide useful information depending on the facts). To be honest however, it should be an easy job for a professional valuer and I would suggest going down that route rather than DIY.
HMRC would have an electronic copy of the 2005 return but exactly what that contains and whether it was on the correct basis, who knows!
It is also possible the Valuation Office hold something but only if they were asked to negotiate a value, which I would suspect is most unlikely.
The VOA might however be able to help anyway if you pursue via a post transaction valuation check (or something similar).
Finally, if not a case to which OMV applies you would need to know costs. It is possible HMRC had some information but it would have been in the ex-husband's records and not something they could necessarily share. Given the age however I think it unlikely and you might try to argue that OMV gives the best estimate (or ask HMRC what they think you can do in the circs).

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By bernard michael
12th Jun 2018 09:43

Thanks everyone for the tips. I'm getting closer to resolution.
Rightmove was a good idea and provided very good information
Unfortunately the client is still very vague about dates but her children (also clients) have provided additional helpful details
I'm also hoping to get a copy of the divorce settlement from the dead solicitors firm's archives but it's a big ask going back that far

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By kevinringer
13th Jun 2018 13:37

So you're the third accountant she has had since 2016? Why? Hope you get your fee up front.

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Replying to kevinringer:
By SteLacca
13th Jun 2018 14:40

Because she keeps killing them off. Keep up, man ;)

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