CG17745 - Indexation: disposals 30/11/93+: previous no gain/loss transfer before 30/11/93

Example

  • January 1989 A buys land for £150,000
  • January 1992 A transfers the land at no gain/no loss to spouse
  • January 1995 spouse sells the land for £130,000 Allowable costs of disposal were £4,000.

COMPUTATION ON A

- - - £
- Disposal proceeds (see note 1) - 184,650
Less Cost - 150,000
- Unindexed gain - 34,650
Less Indexation January 1989 - January 1992 -
- - 150,000 x 0.231 34,650
- CHARGEABLE GAIN/ALLOWABLE LOSS - NIL

COMPUTATION ON SPOUSE

- - - £
- Disposal proceeds - 130,000
Less Cost (see note 1) 184,650 -
- Costs of disposal 4,000 188,650
- Unindexed loss - (58,650)
Less Indexation (see note 2) = - NIL
- ALLOWABLE LOSS - 58,650

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: This indexation is subject to the general rule that for disposals on or after 30 November 1993 indexation does not create or increase a loss.