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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Expenditure: enhancement expenditure: on the asset

`The asset’ is the asset which is the subject of the disposal and on which the capital gain or loss is being computed.

Payment may be made IN CONNECTION WITH that asset, without being expenditure ON the asset. For example, a parent company may be required by the purchaser to secure the resignation of certain officers of a subsidiary company before completion of the sale of shares in that subsidiary. In order to achieve this, the parent company makes compensation payments to those officers. The shares are `the asset’ here. The compensation payments cannot be regarded as expenditure ON THE SHARES.