Indexation allowance is a relief for inflation and takes the form of an additional deduction in arriving at the amount of the chargeable gain. Since 5 April 2008, indexation allowance has only been available for disposals by companies and it has been frozen at December 2017. Although there are special rules for most shares (see ¶15675), the indexation allowance is generally calculated as follows.

Step 1

Identify each item of allowable expenditure. (Any item of expenditure incurred on or after 1 January 2018 is excluded.)

Step 2

Calculate the indexed rise in that expenditure.

Need help? Get subscribed!

To subscribe to this content, simply call 0800 231 5199

We can create a package that’s catered to your individual needs.

Or book a demo to see this product in action.