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HMRC internal manual

Capital Gains Manual

Expenditure: allowable: cost of acquisition or creation

TCGA92/S38 (1) (a)

If the disposer acquired the asset this is consideration which was given wholly and exclusively for the acquisition of the asset plus the incidental costs of acquisition. If the disposer created the asset - for example, copyright or goodwill of a business - the cost of acquisition is the expenditure wholly and exclusively incurred by him or her in creating it, if any.

There are special rules which apply where taxpayers owned an asset at 6 April 1965 (but not for disposals by individuals, trustees and personal representatives on or after 6 April 2008) or 31 March 1982. The taxpayer may be able to substitute the market value at the relevant date for the actual cost. For instructions see CG15500+ and CG16700+ respectively.

For the acquisition cost of land with development value, see CG72600+.