CG17517 - Indexation: example: chattel exemption and capital allowances

X Ltd buys a van in March 1989 for £6,800.

It sells it in March 1993 for £5,000.

Net capital allowances are £1,800.

Disregarding TCGA92/S41 the computation would be

-	-	-	£
-	Disposal proceeds (deemed) - TCGA92/S262 (3)	-	6,000
Less	Cost	-	6,800
-	Unindexed loss	-	800
Less	Indexation	6,800 x 0.240	1,632
-	ALLOWABLE LOSS	-	(2,432)

Applying TCGA92/S41 gives the following result:

-	-	-	£
-	Disposal proceeds (deemed)	-	6,000
Less	Cost	6,800	-
-	Deduct capital allowances	1,800	5,000
-	Unindexed Gain	-	1,000
Less	Indexation	5,000 X 0.240	1,200
-	ALLOWABLE LOSS	-	(200)