CG17491 - Indexation: example: assets held at 31 March 1982
12 March 1979 X buys a field for £100,000.
31 March 1982 value is £85,000.
12 March 1989 X sells field for £80,000.
| - | - | - | £ |
|---|---|---|---|
| - | Disposal proceeds | - | 80,000 |
| - | Value 31.3.82 | - | 85,000 |
| - | Unindexed loss | - | (5,000) |
| Less | Indexation | 100,000 x 0.414 | 40,400 |
| - | - | - | (46,400) |
It is clear that the kink test, using the greater original cost of £100,000, will give a greater loss than rebasing does. This is the most common instance after 31 March 1982 of indexation and cost being based on different figures apart from those no gain/no loss situations to which rebasing does not apply.