Expenditure is disallowed if it is reimbursed – or otherwise met directly or indirectly – by the Crown, any government, any public authority or any local authority (TCGA 1992, s. 50).

Example 1

Basil purchased a hotel in November 1982 for £150,000. At the time of acquisition, he also incurred additional costs of £200,000 creating an extra bedroom block and in respect of that work received a grant of £75,000 from English Heritage. He sold the hotel for £950,000 in December 2019. The chargeable gain arising is as follows :

£

£

Proceeds

950,000

Cost

150,000

Additions

200,000

Less: grant

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