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HMRC internal manual

Capital Gains Manual

Leases: grant of lease out of short lease: restriction of capital loss

The operation of TCGA92/SCH8/PARA6 (1) cannot convert an indexed loss into a chargeable gain. Where the relief given under ITTOIA05/S292 or CTA09/S232 exceeds the indexed loss, the result is no gain/no loss.

NOTE. If a taxpayer 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+.