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Party animals

25 September 2012 / Kevin Slevin
Issue: 4372 / Categories: Comment & Analysis , Capital Gains
KEVIN SLEVIN considers whether expenditure that enhances the value of an asset is always tax deductible


  • A shareholder agrees to pay an employee a proportion of any personal share sale proceeds.
  • Is that payment deductible under TCGA 1992 s 38?
  • Has the nature of the asset been changed by the payment?
  • Other ramifications: is this employment income under ITEPA 2003 Part 7A?
  • Is it time for a review of TCGA 1992 s 38?

Capital gains tax has been with us for nearly 50 years. There have been many changes since FA 1965 introduced it but most of the basics have changed little.

A good example of this is what is now TCGA 1992 s 38 which determines exactly what expenditure can be deducted when computing the amount of any capital gain.

In the vast majority of cases it is...

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