CG17745 - Indexation: disposals 30/11/93+: previous no gain/loss transfer before 30/11/93

Example

• January 1989 A buys land for £150,000
• January 1992 A transfers the land at no gain/no loss to spouse
• January 1995 spouse sells the land for £130,000 Allowable costs of disposal were £4,000.

COMPUTATION ON A

-	-	-	£
-	Disposal proceeds (see note 1)	-	184,650
Less	Cost	-	150,000
-	Unindexed gain	-	34,650
Less	Indexation	January 1989 - January 1992	-
-	-	150,000 x 0.231	34,650
-	CHARGEABLE GAIN/ALLOWABLE LOSS	-	NIL

COMPUTATION ON SPOUSE

-	-	-	£
-	Disposal proceeds	-	130,000
Less	Cost (see note 1)	184,650	-
-	Costs of disposal	4,000	188,650
-	Unindexed loss	-	(58,650)
Less	Indexation (see note 2) =	-	NIL
-	ALLOWABLE LOSS	-	58,650

Note 1: On the no gain/no loss transfer, the asset is disposed of and acquired for such an amount as gives the transferor no gain/no loss, TCGA92/S56 (2).

Note 2: This indexation is subject to the general rule that for disposals on or after 30 November 1993 indexation does not create or increase a loss.