Guide

CGT Allowable Costs: What You Can and Cannot Deduct in 2026/27

Written by James Whitfield · Last checked 18 October 2026 Checked against GOV.UK and the HMRC Capital Gains Manual

Quick answer

You can deduct three kinds of cost from a capital gain: what you paid for the asset, the costs of buying and selling it (Stamp Duty, legal, survey, estate agent and dealing fees), and money spent on improvements still there when you sell, such as an extension.¹ Repairs, decorating, mortgage interest and your own time do not count. At the 24% rate, every £1,000 of cost you leave out adds £240 to your 2026/27 bill.

Key facts

The list of incidental costs in the law is exhaustive: professional fees, costs of transfer (including Stamp Duty), advertising to find a buyer or seller, and valuations needed for the computation.²
"Normal maintenance costs, such as decorating, do not count", says GOV.UK.¹
A beneficiary selling an inherited house can deduct the cost of the property being transferred to them, but not the executors' cost of obtaining probate.³⁴
For shares, broker fees and stamp duty on purchases are added to the Section 104 pool; fees on a sale come off the proceeds.⁵
2026/27: £3,000 annual exempt amount, then 18% within your basic-rate band and 24% above it.

What costs can you deduct from a capital gain?

Allowable and not allowable, property

Allowable	Not allowable
Purchase price (or market value if gifted to you, probate value if inherited)	Mortgage interest and arrangement fees
Stamp Duty Land Tax, LBTT or LTT paid when you bought	Repairs and like-for-like replacements
Solicitor and conveyancing fees, buying and selling	Decorating, cleaning, gardening
Survey and valuation fees	Insurance, service charges, ground rent, council tax
Estate agent and auction fees, advertising the sale	Letting agent fees (an income cost)
Extensions, loft conversions, conservatories, new garage	Improvements no longer there when you sell
Legal costs of defending your title, such as a boundary dispute	Your own time and labour
Valuation needed to work out the gain	Costs of arguing with HMRC about the valuation

Costs that were deductible from rental income, or were claimed as capital allowances, cannot be deducted again from the gain.

Is it a repair or an improvement?

This is where most mistakes happen. The test is whether the spending added something new to the property that is still reflected in its state when you sell.¹

Improvement (allowable): an extension, converting a loft or garage into a room, adding a bathroom where there was none, a new conservatory, installing central heating in a house without any.
Repair (not allowable): replacing a boiler, kitchen or windows with modern equivalents, re-roofing with similar materials, fixing damp, replastering, a new carpet.
Gone by the sale (not allowable): a kitchen you fitted in 2012 and replaced in 2022 counts for nothing; only the current kitchen, if it was an improvement, can count.

Where a job mixes both, such as a kitchen refit that also knocked through a wall to enlarge the room, a reasonable split between the two is normally accepted if you can show the invoices.

Worked example: what forgotten costs are worth

Helen, a higher-rate taxpayer, sells a buy-to-let for £275,000 in 2026/27. She bought it in 2015 for £180,000 and paid £1,100 Stamp Duty, £1,200 legal fees and £500 for a survey. She built a £22,000 rear extension, replaced the boiler for £3,000 and redecorated for £2,500. Selling cost £3,960 in agent's fees and £1,400 in legal fees.

Helen's gain, with and without her costs

Sale price	£275,000
Less purchase price	−£180,000
Less buying costs (£1,100 + £1,200 + £500)	−£2,800
Less extension	−£22,000
Less selling costs (£3,960 + £1,400)	−£5,360
Boiler and redecoration: repairs, not deductible	£0
Gain	£64,840
Less annual exempt amount	−£3,000
CGT at 24% on £61,840	£14,841.60
If she deducted only the purchase price: 24% × £92,000	£22,080.00

Claiming the £30,160 of allowable costs saves Helen £7,238.40. Claiming the boiler and decorating as well would have been wrong and, if found, would be corrected with interest and possibly a penalty.

Want a fill-in property gain worksheet and the reliefs explained before you file? get the CGT Survival Pack, £4.99 →

What can you deduct on an inherited property?

Your starting cost is the probate value: the market value at the date of death, usually the value agreed for inheritance tax. On top of that:

You can deduct costs of the property being transferred into your name, such as the conveyancing on the assent, whether you or the executors paid them.³ Then add your own improvement and selling costs.
You cannot deduct the executors' costs of establishing title: probate fees, death certificates, the probate valuation, the solicitor's work on the grant.⁴ Those belong to the estate.
If the executors sell instead, they can deduct an appropriate share of the cost of establishing title, using HMRC's SP2/04 scale or the actual cost. Estates pay 24%: see CGT for executors.

More on the base cost and a full example: CGT on inherited property.

What costs count when you sell shares, funds or crypto?

Broker commission and the 0.5% stamp duty on UK share purchases form part of your cost. Platform fees charged as a percentage of the portfolio are not, because they are not tied to a purchase or sale. For crypto, exchange fees on buying and selling tokens count; network (gas) fees paid to make a disposal can count as a selling cost. Keep the fee records with each trade: see crypto tax records.

What evidence should you keep?

Completion statements from both the purchase and the sale, the Stamp Duty return, invoices for each improvement with dates, and bank statements showing payment. Keep them for the life of the asset and then for the record-keeping period after you report: our CGT records guide has the time limits. If invoices are lost, a builder's written confirmation, planning or building-control records and photographs help show the work happened.

Put your costs into the calculator

Enter buying costs, selling costs and improvements separately to see the effect of each on your 2026/27 bill.

Open the property CGT calculator

Frequently asked questions

Can I deduct Stamp Duty from my capital gain?

Yes. Stamp Duty Land Tax (or LBTT in Scotland, LTT in Wales) paid when you bought the property is a cost of acquisition and is deducted from the gain, along with the legal fees on the purchase.

Can I deduct mortgage interest or repairs from capital gains tax?

No. Mortgage interest, repairs, decorating, insurance and other running costs are not allowable for CGT. For a let property, some of them may be deductible from rental income instead.

Which home improvements count for capital gains tax?

Capital spending that added to the property and is still reflected in it when you sell: an extension, a loft conversion, a new kitchen where there was none, a conservatory. Replacing like for like is a repair, which does not count.

Can I claim probate fees or death certificates against CGT on an inherited house?

Not as a beneficiary. HMRC treats the cost of establishing title (probate, death certificates, valuation for probate) as the executors' expense. If the executors sell, they can deduct a share. A beneficiary can deduct the costs of transferring the property into their name, and their own selling costs.

Can I deduct my own time spent doing up a property?

No. Only money actually spent counts. Materials and paid labour for a qualifying improvement are allowable; the value of your own work is not.

Do I need receipts for allowable costs?

Yes. Keep invoices, completion statements and bank records. HMRC can ask for evidence, and a cost you cannot show may be disallowed.

This page is general information, not tax advice. It reflects GOV.UK guidance and HMRC's Capital Gains Manual as checked on 18 October 2026. Mixed repair and improvement work, and properties used partly for business, may need professional advice.

Sources & references

The rates, allowances and rules in this guide are drawn from the official HMRC and GOV.UK sources below, checked for the 2026/27 tax year. Each link opens the relevant government page in a new tab.

Verified against published HMRC and GOV.UK guidance.