CGT - reductions include Additional dwelling supplement on purchase?

vouch0r

CGT states:

Deduct costs

You can deduct costs of buying, selling or improving your property from your gain. These include:

• estate agents’ and solicitors’ fees
• costs of improvement works, for example for an extension (normal maintenance costs, such as decorating, do not count

Would this classify the Additional dwelling supplement as being part of the buying costs? I assume this is yes but not sure how to get clarification on what defines a buying cost...

Jeremy535897

The legislation is here (section 38 TCGA 1992):

"38Acquisition and disposal costs etc.

(1)Except as otherwise expressly provided, the sums allowable as a deduction from the consideration in the computation of the gain accruing to a person on the disposal of an asset shall be restricted to—

(a)the amount or value of the consideration, in money or money’s worth, given by him or on his behalf wholly and exclusively for the acquisition of the asset, together with the incidental costs to him of the acquisition or, if the asset was not acquired by him, any expenditure wholly and exclusively incurred by him in providing the asset,

(b)the amount of any expenditure wholly and exclusively incurred on the asset by him or on his behalf for the purpose of enhancing the value of the asset, being expenditure reflected in the state or nature of the asset at the time of the disposal, and any expenditure wholly and exclusively incurred by him in establishing, preserving or defending his title to, or to a right over, the asset,

(c)the incidental costs to him of making the disposal.

(2)For the purposes of this section and for the purposes of all other provisions of this Act, the incidental costs to the person making the disposal of the acquisition of the asset or of its disposal shall consist of expenditure wholly and exclusively incurred by him for the purposes of the acquisition or, as the case may be, the disposal, being fees, commission or remuneration paid for the professional services of any surveyor or valuer, or auctioneer, or accountant, or agent or legal adviser and costs of transfer or conveyance (including stamp duty or stamp duty land tax) together—

(a)in the case of the acquisition of an asset, with costs of advertising to find a seller, and

(b)in the case of a disposal, with costs of advertising to find a buyer and costs reasonably incurred in making any valuation or apportionment required for the purposes of the computation of the gain, including in particular expenses reasonably incurred in ascertaining market value where required by this Act."

Stamp duty land tax was added to section 38 in 2003. The absence of reference to ADS does not mean that it is not allowable. In my view it is an incidental cost of acquisition and therefore allowable. There is probably something somewhere that states that references like this to stamp duty include references to Scottish taxes on transfers of assets, but I don't know where it is.