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HMRC internal manual

Capital Gains Manual

HM Revenue & Customs
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Indexation: from 6/4/88: wasting assets

In the case of a wasting asset, indexation is due on the expenditure actually allowable, after the wasted expenditure has been deducted.

See example in CG17484.

On the disposal of a wasting asset, see CG76700+, where indexation is based on the 31 March 1982 value, it should be restricted exactly as if it were an actual cost incurred on that date.

In applying the `wasting asset’ exclusion to the 31 March 1982 value in the case of a lease of land which had less than fifty years to run at the date of disposal, see CG71141+ and CG71160+, the percentage in the Table for the duration of the lease at the beginning of the period of ownership, P(1), should be ascertained on the basis that the lease was acquired on 31 March 1982 at a cost equal to its market value on that date.