CG17209 - Indexation: basic computations
TCGA92/S52A
As part of CGT Simplification, indexation is no longer available in respect of disposals made on or after 6 April 2008.
However CGT Simplification does not apply to companies who pay corporation tax on their chargeable gains. From 6 April 2008 TCGA92/S52A provides that indexation will only apply for the purposes of corporation tax.
The following guidance will therefore be applicable to both CGT and corporation tax on chargeable gains for disposals by companies made on or before 5 April 2008 but only to corporation tax on chargeable gains for disposals by companies made on or after 6 April 2008.
The allowance is normally the amount arrived at by applying the indexation factor to each item of expenditure (or value), within TCGA92/S38 (1)(a) and (b), incurred or treated as incurred by the person disposing of the asset. Although in practice computations often treat the allowance as an addition to cost, in strictness the allowance is deducted from the gain in order to arrive at the chargeable gain, and computations sent to taxpayers or their agents should be laid out in the correct form.
Layout of guidance
The rest of the instructions are laid out as follows.
CG17230 - CG17292 | Rules from 6/4/1988 - Basic principles and simple computations |
CG17310 - CG17313 | Rules from 6/4/1988 - Basic examples |
CG17350 - CG17409 | Rules from 6/4/1988 - Various specific circumstances |
CG17430 - CG17450 | Rules from 6/4/1988 - Indexation and Capital Allowances |
CG17480 - CG17517 | Rules from 6/4/1988 - Further examples - Specific circumstances |
CG17540 - CG17549 | Specific rules applicable April 1982 to March1985 |
CG17570 - CG17601 | Specific rules applicable April 1985 to March 1988 |
CG17700 - CG17768 | Specific rules applicable from 30 November 1993. |
CG17800 - CG17880 | FA 1994 Transitional Relief - applicable 1993/4 and 1994/5 only |
Shares
Shares and other assets which form part of a pool are subject to different bases of computation. Please refer to the relevant guidance in the section beginning at CG51500 when dealing with such assets.