In 2010, I bought a buy-to-let property for £180,000. I spent £15,000 on an extension (capital improvement) and £2,000 on legal fees when buying. In June 2025, I sold the property for £320,000, paying £4,000 in estate agent and legal fees on the sale. I am a higher-rate taxpayer and have no other capital gains in the year. What is my capital gains tax (CGT) position? 

Arthur Weller replies:  

Your capital expenditure is £180,000 plus £15,000 plus £2,000 plus £4,000 = £201,000. You sold for £320,000, so you have made a gain of £119,000. You have an annual exemption of £3,000, so you are subject to CGT at 24% (higher rate) on £116,000 = £27,840.