CG17481 - Indexation: example: part-disposal
1 June 1982 Y acquires office premises for £100,000.
1 June 1985 premises improved by spending £25,000 on car parking and an entrance.
1 June 1988 part of premises sold for £45,000, the part retained is worth £180,000.
1 June 1990 rest of premises sold for £160,000.
FIRST DISPOSAL
The part-disposal formula, see CG12731, gives
|
4 5 , 0 0 0 |
|
(180,000 + 45,000) |
This is 1/5
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£ |
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Disposal proceeds |
45,000 |
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LESS |
Proportion of cost |
1/5 of 100,000 20,000 |
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1/5 of 25,000 5,000 |
25,000 |
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Unindexed gain |
20,000 |
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LESS |
Indexation |
20,000 at 0.302 6,040 |
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|
5,000 at 0.117 585 |
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INDEXED GAIN |
13,375 |
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The residual expenditure |
80,000 on 1 June 1982 |
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20,000 on 1 June 1985 |
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SECOND DISPOSAL
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|
£ |
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Disposal proceeds |
160,000 |
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LESS |
Cost (residual expenditure) |
80,000 |
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20,000 |
100,000 |
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Unindexed gain |
60,000 |
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LESS |
Indexation |
80,000 at 0.548 |
43,840 |
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|
|
20,000 at 0.328 |
6,560 |
50,400 |
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|
INDEXED GAIN |
9,600 |
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