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
|LESS||Value at March 31 1982||90,000|
|LESS||Indexation March 1982 - January 1992 90,000 x 0.707||63,630|
|CHARGEABLE GAIN/ALLOWABLE LOSS||NIL|
COMPUTATION ON SPOUSE
|LESS||Cost (see note 2)||90,000||90,000|
|Costs of disposal||4,000||94,000|
|LESS||Indexation (see note 3) =||66,000|
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.