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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Enhancement expenditure: period before newly-acquired property let

If a property is acquired in a dilapidated condition, expenditure incurred in repairing it and putting it into a fit state for letting (including expenditure on decorations) may be inadmissible as a deduction for Profits of a Property Business, see PIM2020. For Capital Gains purposes, however, such expenditure as cannot be deducted in computing income may be regarded as allowable expenditure under TCGA92/S38 (1)(b).