The incidental cost of disposal is valuation fees, advertising cost, legal fees, etc. In this case, Henrietta sold a flat with the legal fees was £4,000. The allowable costs include the original cost of acquisition, incidental cost of acquisition, capital expenditure incurred in enhancing the asset. According to the information in the scenario, the flat has the original cost £80,000 and the capital expenditure incurred in converting the house £32,000. Henrietta sold only one part of the house so that Henrietta needs to use the part disposal to calculate the accurate amount of the part of that house.
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