CG50607 - Share identification rules: section 104 holding: CGT from 1998-99
TCGA92/S110A
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+.
Freezing indexation allowance for a Section 104 holding is
achieved by TCGA92/S110A, which requires that, for disposals on or
after 6 April 1998
- the pool of indexed expenditure is not indexed from the date of the last operative event to the date of the next operative event, but
- the amount of the pool of indexed expenditure is the amount which it would have been if the whole holding had been disposed of on 5 April 1998.
The pool of indexed expenditure is therefore indexed by adapting the formula in CG50606
|
RE - RL | ||
|
RL |
so that RE is the Retail Prices Index for April 1998 (162.6)
and RL is the date of the last operative event before 5 April 1998
(or the date the holding came into existence if there has been no
operative event).
The examples in CG50608 illustrate the calculate of
indexation allowance for Capital Gains Tax purposes from 1998-99
onwards.
