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HMRC internal manual

Capital Gains Manual

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Indexation: disposals 4/85 to 3/88: 1985 changes

FA85/S68

This section describes two of the amendments brought in by FA85/S68 and FA85/SCH19. The remainder are covered in the general instructions. The major changes introduced were as follows:-

i) The extension of the indexation allowance to losses so that the indexation allowance may create or augment an allowable loss.

ii) The removal of the twelve month waiting period for the indexation allowance so that indexation is calculated with immediate effect from the date expenditure on the asset was incurred.

iii) The introduction of a provision enabling a taxpayer to claim, in respect of an asset held on 31 March 1982, that indexation be calculated by reference to the market value of the asset on that date.

iv) Various changes to the pooling rules for shares, see CG51601.

FA85/S68 (1)

Application date

Generally these provisions apply to disposals on or after `the 1985 date’. In these instructions, `the 1985 date’ means 1 April 1985 in the case of holdings or disposals by companies and 6 April 1985 in any other case.