Taxes Consolidation Act 1997 section 552

Acquisition, enhancement and disposal costs

Section 552 sets out the expenditure allowable as deductions when computing a chargeable gain for capital gains tax purposes, covering acquisition costs, enhancement expenditure and disposal costs.

• Allowable deductions include the cost of acquiring the asset, enhancement expenditure reflected in the asset's state at disposal, and incidental costs of acquisition and disposal.
• Where borrowings used to acquire or enhance an asset are subsequently forgiven, the allowable cost must be reduced by the amount released, ensuring only the true economic cost is deductible.
• Incidental costs such as professional fees, legal costs, stamp duty and advertising must be incurred wholly and exclusively for the acquisition or disposal to qualify as deductions.
• Interest on borrowings is not deductible unless capitalised, and insurance premiums are never allowable deductions for CGT purposes.