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In Smith v Schofield (65TC669), the question at issue was whether time apportionment, see CG15570, was to be applied before or after indexation. »Ê¹ÚÌåÓýapp House of Lords confirmed the practice which HMRC has always followed, namely that the order of the computation is this:

• Compute the unindexed gain, see CG17232,
• Calculate indexation and deduct it from the unindexed gain,
• Apply time-apportionment to the indexed gain.

See example in CG17480.

It should be noted that it is still necessary to apply time- apportionment when operating the `kink test� for the purposes of rebasing, if the asset in question was held at 6 April 1965. See Example 2 in CG16741.