CG17600 - Indexation: disposals 4/85 to 3/88: example: no gain/loss
5 June 1970 A Ltd acquired a property for £100,000.
5 September 1984 it transferred the property to B Ltd a fellow group member within the meaning of ICTA70/S272, now TCGA92/S170.
5 November 1985 company B disposed of the property outside the group for £800,000.
The market value of the property at 31 March 1982 was £680,000 and company B makes a claim for this to be substituted for the relevant allowable expenditure on the property up to 31 March 1982.
Ignoring any cost of transfer etc, the gain is computed as follows:-
| - | - | - | £ |
|---|---|---|---|
| Disposal by A | - | - | - |
| - | Cost | - | 100,000 |
| Plus | Indexation | 100,000 x 0.134 | 13,400 |
| - | Deemed sale proceeds | - | 113,400 |
| Disposal by B | - | - | - |
| - | Disposal proceeds | - | 800,000 |
| - | Deemed cost | 113,400 | - |
| Less | Indexation given to A Ltd | 13,400 | 100,000 |
| - | Unindexed gain | - | 700,000 |
| Less | Indexation given to A Ltd | 680,000 x 0.207 | 140,760 |
| - | INDEXED GAIN | - | 559,240 |