Having read more about this since I started the thread, & thought about it more, I've changed my stance somewhat & do not consider what Mr Alexander did to have been such an issue.
I do think it is still wrong for him to be seen to have profited from using the expenses system to do the property up before selling it, however the CGT part of the story appears to be not much of a problem at all (apart from still being embarrassing for Nick Clegg, of course, given his & the party's stance on CGT...).
There is no way Mr Alexander can return any CGT not paid because, quite simply, it was never actually due. I'm not sure the Taxman takes donations from people who were not actually liable for tax?
It is not as if he told the expenses people one thing ("London = 2nd home") and HMRC another thing ("London = primary home")...
The property in London *was* actually his main residence before he became an MP.
After he became an MP, he bought a property in his constituency in Scotland, & designated that as his main residence & his London property as his second home, for the purpose of Parliamentary expenses.
However, as far as actual tax law was concerned when he later came to sell his London property, he quite simply was not liable for CGT on it, because it *had* been used as his main residence within the last three years. There was no dodging, no avoiding, it was simply that's what the law said.
Funnily, it also seems that Mr Alexander did nothing which the Telegraph does not advise its own readers of doing... Perhaps he had simply been reading this?
Telegraph - Home, sweet second home
However, I'm not sure that "Danny Alexander, new Treasury chief, follows Telegraph advice & avoids CGT" would have been such a good headline...