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Indexation allowance and rebasing


Produced by Tolley in association with
Corporation Tax
Guidance

Indexation allowance and rebasing


Produced by Tolley in association with
Corporation Tax
Guidance
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This guidance note explains the general rules surrounding the availability of indexation allowance (which was frozen at December 2017) on the disposal of company assets and provides information on the rebasing rules for assets held on 31 March 1982. For an overview of the general position regarding company disposals, please refer to the Corporate capital gains ― overview and Calculation of corporate capital gains guidance notes.

Indexation allowance

Indexation allowance is relevant to assets which were acquired before 1 January 2018. It is given to allow for the effect of inflation on the value of assets and is based on the Retail Price Index (RPI). When calculating the tax position on the disposal of a company asset, indexation allowance is deducted from the unindexed gain but can only reduce it to nil. It cannot create or increase a loss.

Indexation allowance has been frozen with effect from 1 January 2018. For disposals made on or after this date, indexation allowance is only given up to December 2017. No indexation allowance is available

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Jackie Barker
Jackie Barker

Tax Partner at Wells Associates , Corporate Tax, OMB, Employment Tax, Personal Tax, VAT, IHT Trusts and Estates, Accounting

I have worked in tax since becoming an associate of the CIOT in 2004, having previously qualified as a member of ACCA.As tax partner with Wells Associates I advise on all aspects of direct taxation including personal and corporate planning. We work with a wide range of individuals and owner-managed businesses offering guidance and support at all stages, from assisting with compliance matters through to advising on more complex strategic matters and providing tax efficient solutions.

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  • 09 Dec 2023 00:20

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