What Allowable Expenditure Can I Claim Against Capital Gains Tax?

If you sell an asset for more money than you paid for it, you may need to pay capital gains tax on the difference. 

To reduce your capital gains tax bill, you can include certain costs on your tax return.

We call this allowable expenditure – this includes the price you paid for it, anything you’ve spent improving its value for example if you extend a house. The improvement must still exist when you sell or dispose of the asset. You can also include the costs involved in buying & selling your asset such as fees & other charges from surveyors, valuers and accountants but not the cost of calculating your capital gains tax bill, any transfer or conveyancing costs such as solicitors fees, stamp duty land tax (SDLT),  any advertising costs and if needed the cost of confirming who owns or is entitled to the asset.

Costs you can claim when working out your income tax are not allowed when it comes to capital gains tax: for example if you’re selling a house you’ve been letting out, you can’t claim for general maintenance costs or the cost of financing the property.

If you owned an asset on the 31st of March 1982 you may be able to use the market value on this date for the actual cost using special rules. You can find more information about allowable expenditure including HMRC special rules in the capital gains manual on gov.uk