Since 5 April 2008, indexation allowance has only been available for disposals by companies. Although there are special rules for most shares (see ¶15675), the indexation allowance is generally calculated as follows.
Identify each item of allowable expenditure. (Any item of expenditure incurred on or after 1 January 2018 is excluded.)
Calculate the indexed rise in that expenditure.
This is done by applying the following formula (expressed as a decimal and rounded to the nearest third decimal place) to each item of allowable expenditure:
RD – RI
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