TCGA92/S54 (4)

In general, under TCGA92/S54 (4), the dates on which items of RAE are assumed to have been incurred for the purposes of indexation allowance are:-

(1)costs of acquisition, when the asset was acquired or provided, and

(2)additional expenditure, when the expenditure became due and payable.

See example in CG17312.

There are no special provisions concerning expenditure financed by borrowing. This is because generally the seller's indexation runs up to the date of disposal and the buyer's runs from the same date. The only mismatch occurs when the seller sells before he buys, because indexation cannot run backwards.

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