Date of conversion of enhancement expenditure incurred in a foreign currency

I purchased an overseas property in 2007 and sold it in 2022. For the purposes of calculating the capital gain I understand that I convert the acquisition costs at the exchange rate prevailing as at the date of acquisition and the sale proceeds at the exchange rate prevailing at the date of sale. However, I have some items of allowable enhancement expenditure incurred in Euros relating to work undertaken on the property. Do I convert them to sterling as at the date of sale or do I convert, in each case, by reference to the prevailing exchange rate as at the date each expense was incurred? I could not see a clear answer in the HMRC Manual although, logically,I would think that it is the date of sale as that is when the Enhancement is realised.

Hi,

Each currency conversion is applied at the time the transaction arises. For enhacement expenditure, you would convert this using the a fair and reasonable exchange rate in place at the time the enhancements took place.

Thank you.