Saving Tax by Keeping a Property Register
Property businesses pay tax based on the initial intention behind the purchase of a particular property, so you need some way to record your intention.
Keeping a file for each property, called a property register, helps fireproof you against the taxman by detailing your intentions and decisions. After all, some years down the line, you may have difficulty recalling why some decisions were made, so keeping accurate, written records makes sense.
A property register should contain at least:
The statement of purchase from your solicitor showing the buying costs broken down by category, like stamp duty, legal fees and search fees.
A note in writing from your buying solicitor clearly showing the completion date – often this isn’t on the completion statement.
If paid separately, statements showing any valuation and mortgage costs like broker feeds.
During the period of ownership, receipts for any capital spending like the cost of an extension or garage.
The statement of sale from the solicitor showing the selling costs such as estate agent and legal fees.
A list of owners and their percentage share of ownership.
Capital spending can be set off against any gain made when selling a property, so a property register is important for tax saving in years to come.