CGT schedule of capital enhancements

The cost of enhancing an asset, such as structural alterations or improvements to a property, is a capital expense. The cost of the enhancement is deductible when calculating the capital gain or loss following the sale or transfer of the asset.

Allocating and recording expenditure

You should keep a record of all enhancements, and their cost, to an asset within the scope of capital gains tax, e.g. shares, buildings, etc. Make and keep a CGT Schedule of Capital Enhancements to ensure they are not overlooked when the asset is sold or transferred. Note that the only the cost of enhancements which still exist at the time the asset is sold/transferred can be deducted. For example, if a property was enhanced by the addition of a conservatory which was demolished before sale, the cost of adding the conservatory cannot be claimed as a deduction is calculating the capital gain.