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HMRC internal manual

Capital Gains Manual

Enhancement expenditure: cost of acquisition/enhancement expenditure

Where capital expenditure has been incurred between the acquisition of the first interest in an asset and its final disposal, it may be necessary for apportionment purposes to determine whether the later expenditure comes within (a) or (b) of TCGA92/S38 (1).

For example, a subscription to a rights issue of shares, see CG50292, is within (a) but the cost of extending a building or a payment to a sitting tenant for vacating the property, see CG71262, is within (b).