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HMRC internal manual

Capital Gains Manual

Reorganisations of share capital: apportioned cost: use of Interactive Data (Extel): adjustment factors

The Interactive Data Capital Gains Tax Service 1982/1983 - 2008/2009 etc. is a publication held in many offices which may be used to check the 31 March 1982 value of quoted shares and securities. It also gives an adjustment factor which can be used as a short cut method of arriving at the allowable cost of shares held on 31 March 1982. When applied to the 31 March 1982 value the factor adjusts it for subsequent events such as bonus issues and rights issues. The adjustment factors applicable to each event assume that a shareholder will take up their full entitlement to a rights issue. Therefore, they can only be used where a rights issue has been taken up in full. Because the Interactive Data adjustment factor method is non-statutory you can only use it to check computations provided by a customer or their agent. Any computation you send to a customer or agent must be prepared on the statutory basis.

The extent to which indexation allowance can create or increase a loss on a disposal made on or after 30 November 1993 and before 6 April 2008 is subject to restrictions, see CG17700+. A computation using the Interactive Data factors which shows a loss on a disposal on or after 30 November 1993 must be reworked on a statutory basis.

NOTE. If a customer is within the charge to Capital Gains Tax, neither indexation allowance nor taper relief apply to disposals of assets on or after 6 April 2008. Previously indexation allowance had been frozen at April 1998. Companies and other concerns within the charge to Corporation Tax are not affected by these changes. For indexation allowance see CG17207+ and for taper relief see CG17895+.