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HMRC internal manual

Capital Gains Manual

Share reorganisations: consideration paid: indexation allowance


If the shares were held at 31 March 1982 indexation allowance is only due from the date the taxpayer gave or became liable to give the new consideration, TCGA92/S131, see CG51632. The computation is illustrated in the Examples at CG51910 and CG51940. If the shares are held in a Section 104 holding the rights issue will be treated as an operative event. After you have added indexation allowance to the pool of indexed expenditure the cost of the new shares should be added to the pool of qualifying expenditure and the pool of indexed expenditure. The computation is illustrated in the example at CG51895.

NOTE. Indexation allowance does not apply for Capital Gains Tax from 2008-09.