Adjust ltcg against payment for extra area flat purchase

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You're redeveloping your building and have the option to purchase an additional 50 sqft for £15 lakh. You're asking if you can sell shares and use the Capital Gains Tax (CGT) from that sale to offset the cost of the extra area, thereby avoiding tax. Unfortunately, this isn't possible. To claim an exemption under Section 54F, the full proceeds from selling your shares must be invested in a new residential property, not used for partial additions to an existing flat.

Patrick Mathias

Patrick Mathias (Querist)

06 September 2025 My building is going for redevelopment shortly. I have been given some extra area free of cost. I propose to buy another 50 sqft area for which I have to pay 15 lacs. Can I sell my shares and adjust the ltcg tax on shares to pay off the developer and avoid paying tax.

Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

06 September 2025 Not eligible. To claim exemption under Section 54F, the entire sale proceeds of shares would have to be invested in a new residential property—not partial extra space in an existing flat.

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Dhirajlal Rambhia

Dhirajlal Rambhia (Expert)

20 September 2025 Good Luck..

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