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HMRC internal manual

Capital Gains Manual

Indexation: from 6/4/88: assets derived from other assets



  • assets have been merged or divided or have changed their nature or
  • rights or interest over assets have been created or extinguished and therefore
  • the value of an asset [A]
  • is in any way derived from another asset [B]
  • which the taxpayer owns or has owned,

TCGA92/S43, see CG15230, provides that an appropriate proportion of the sums allowable on the disposal of asset B under TCGA92/S38 (1)(a) and (b) shall be attributed to asset A.

If expenditure incurred on asset B, but attributed to asset A, falls within TCGA92/S38(1)(a), for indexation purposes it is treated as incurred when asset A was acquired.

See example in CG17484.

Where a LEASEHOLDER OF LAND acquires a superior interest in the same land he may be able to claim the benefit of the concessional treatment described in CG71400+, so that indexation in respect of expenditure actually on asset B, but attributed to asset A, runs from the date of expenditure. This does not apply to other assets.