Readers’ forum: Granny flat conversion costs

My client has owned his large family home for many years and still lives there.

Some time ago a substantial amount of work was undertaken to convert part of the property into a self-contained ‘granny flat’ for his mother to move into. This included installing a new bathroom and kitchen and creating a separate entrance from outside.

After his mother died by which time his children had left home the granny flat was rented out to a tenant on commercial terms. My client is now selling the entire property and the tenant will be moving out before the sale.

I appreciate that because part of the property had been let out full principal private residence relief will not be available and a capital gains tax computation will be needed.

My question concerns the costs of the granny flat conversion. Do the costs of that...