CG17765 - Indexation: disposals 30/11/93+: assets held by transferor at 31/3/82

• January 1981 A buys land for £80,000 (31 March 1982 market value = £90,000)
• January 1992 A transfers the land at no gain/no loss to spouse
• January 1994 spouse sells the land for £160,000 Allowable costs of disposal were £4,000

COMPUTATION ON A

-	-	£
-	Disposal proceeds	153,630
Less	Value at March 31 1982	90,000
-	Unindexed gain	63,630
Less	Indexation March 1982 - January 1992 90,000 x 0.707	63,630
-	CHARGEABLE GAIN/ALLOWABLE LOSS	NIL

COMPUTATION ON SPOUSE

-	-	£
-	Disposal proceeds	-	160,000
Less	Cost (see note 2)	90,000	90,000
-	Costs of disposal	4,000	94,000
-	Unindexed gain	-	66,000
Less	Indexation (see note 3) =	-	66,000
-	ALLOWABLE LOSS	-	NIL

As the indexation given on the disposal, £66,000, is greater than the rolled-up indexation of £63,630, no further adjustment is required.

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: TCGA92/S55 (6)(b) removes indexation added to the transferee’s RAE on the no gain/no loss transfer.

Note 3: TCGA92/S55 (6)(a) requires indexation to be recomputed on the basis that the asset was held on 31 March 1982. This would be 90,000 x 0.779 = £70,110 but is subject to the general rule that for disposals on or after 30 November 1993 indexation does not create or increase a loss.