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Asset disposals: Which expenses can be offset for CGT purposes?

Shared from Tax Insider: Asset disposals: Which expenses can be offset for CGT purposes?
By Meg Saksida, November 2023

Meg Saksida points out that care is needed when considering whether to deduct certain costs on the disposal of a chargeable asset. 

Capital gains tax is based on the gain on the disposal of a chargeable asset, which itself is a reasonably simple calculation. One takes the cost of the asset from the proceeds, and voilà!  

However, the cost that can be deducted is made up of four different components: the historical cost of the asset, any enhancement expenditure, and the incidental costs of acquisition and disposal. It is these final two components where taxpayers are often unsure of what can be included. 

Incidental costs of acquisition 

Incidental costs of acquisition are defined in the legislation as being only deductible to the extent that they are incurred wholly and exclusively for the purpose of the acquisition of the asset.  

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