Effective from 6 April 2017
This toolkit aims to identify risks for Capital Gains Tax on land and buildings only. Capital Gains
Tax may be due on gains arising from other types of asset. For further guidance on the types of
asset on which Capital Gains Tax may be due see Capital Gains Tax pages.
For any other questions or advice please refer to the Capital Gains Tax Pages and/or Capital
The main areas of risk for Capital Gains Tax on land and buildings broadly fall into five
Good record keeping is essential. Poorly kept records can mean that information provided is not
accurate and may result in expenditure or reliefs being claimed incorrectly. Conversely
allowable expenses or reliefs may not be claimed.
The nature of Capital Gains Tax means that relevant events may have occurred in the distant
past yet still affect the current transaction, for example, a previous part disposal. Having access
to detailed histories of assets also makes it easier to gather the relevant information when
disposals occur and help complete the form correctly and in full.
For Self Assessment tax return purposes, for 2016-17 tax returns filed by the filing date, records
should normally be kept until 31 January 2019, or until 31 January 2023 for self-employed
businesses or partnerships. Records will need to be kept longer for tax returns filed late or
where HMRC have started a check into the return.
Records connected with the acquisition of land and buildings will need to be retained until the
land and buildings are disposed of. After disposal, these records will need to be retained for the
further period in line with general record-keeping requirements.
In the case of a part disposal of land and buildings, records will need to be retained until the
remainder of the asset is disposed of, and then the further period.
For further guidance on record keeping see Record keeping and Capital Gains Tax.
Disposals include the sale, exchange or gift of all or part of an asset. It can also include the loss
or destruction of an asset and the receipt of capital sums derived from assets.
It is important to establish the date of disposal to ensure that Capital Gains Tax is calculated for
the correct tax year. Often the date of disposal will be clear such as when the disposal is made
under an unconditional contract where the date of disposal is the date of the contract. However,
there are occasions when this will not be straightforward, for example when a contract is
A contract is only conditional if particular conditions have to be satisfied before the contract
becomes legally binding. The date on which these conditions are met and the contract becomes
legally binding is the date of disposal.
In respect of land and buildings, valuations are the biggest single area of risk, accounting for a
large part of our compliance checks. This is particularly so where the valuation is not referred to
a qualified independent valuer and it is important to make sure the valuation is made for the
purposes of relevant legislation and meets Royal Institution of Chartered Surveyors or
equivalent standards in appropriate cases.
Issues that are sometimes overlooked when instructions are given to a valuer include:
the potential for development of land
the existence of tenancies