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HMRC internal manual

Capital Gains Manual

Assets held on 6/4/65: additional expenditure

TCGA92/SCH2/PARA16 (4)Where, after acquisition of an asset, there is additional expenditure on the asset on one or more occasions, and this is allowable under TCGA92/S38 (1)(b), see CG15160+, then, subject to CG15576,

  • the overall gain should be apportioned pro rata to the respective items of expenditure (including the original cost of acquisition); and
  • the time-apportionment formula should then be applied to each part of the gain as so apportioned in turn (by reference to the respective dates when each item of expenditure was first reflected in the state or nature of the asset).The items of expenditure referred to are exclusive of any indexation allowance.

  • The example in CG15575 illustrates the normal basis of computation as set out above.
  • See also CG15579 if part of the enhancement expenditure was incurred on or after 6 April 1965.Where there has been frequent allowable expenditure of relatively small amounts, no objection need be raised to the grouping of items and attributing to each group a mean date which will give an approximately correct overall result.