I'm looking to invest in real estate in South Wales where I live currently.

Say tomorrow I bought a run down house in Swansea for £80,000. 3 bed, big kitchen, and garden. The only problem is that it hasn't been lived in five years and needs a healthy refurbishment. I put a further £20,000 into the property and make it habitable and desirable. Now the house is worth £110,000; but that's not enough money to make me want to sell. I rent the house and hold it for 25 years.

Now the house is worth an estimated £200,000 and I sell, making a £100,000 profit in the purchase. But in theory Capital Gains Tax is what it still is now.

I have 10 identical properties and I sell them all in the same year. I generate £2,000,000.

Here's where my question comes in. Because I invested a further £200,000 into the properties, can I offset that against the tax?

So, my total gross profit is £1,000,000. The CGT I pay is: £280,000. My net profit is: £720,000.

Or would my gross profit count as £1,200,000. So the CGT I pay is: £336,000.

Can someone enlighten me please? I'd super appreciate it.

And yes, I do know my profit isn't actually the profit it looks like, because of inflation rates! And I haven't taken into consideration profit from rent.