Indexation: example: sale and leaseback
X Ltd acquires in March 1987 a printing press costing £100,000.
It is disposed of in March 1993 under a sale and leaseback arrangement for £27,000.
The capital allowances, after deducting the balancing charge, amount to £73,000.
A sale and leaseback is treated as a part-disposal. See CG70774.
The value of the retained interest is £1,000.
|(27,000 + 1,000)|
|Deduct capital allowances||73,000||23,428|
|LESS||Indexation||23,428 x 0.385||9,020|