»Ê¹ÚÌåÓýapp

FA94/SCH12
ICTA88/S574, TCGA92/S161
Eligibility
Indexation losses

FA94/SCH12

FA94/SCH12 introduced a transitional relief to the rules described at CG17700+. This transitional relief is available to individuals, and trustees of settlements made before 30 November 1993. »Ê¹ÚÌåÓýappre is no transitional relief for trustees of settlements made on or after 30 November 1993, or for companies. See below.

»Ê¹ÚÌåÓýapp transitional relief is available in respect of amounts of INDEXATION LOSS on disposals made by the taxpayer in the period 30 November 1993 to 5 April 1995. See below.

»Ê¹ÚÌåÓýapp transitional relief is available for the years 1993-94 and 1994-95 only, and is subject to an overall limit of £10,000. »Ê¹ÚÌåÓýapp way in which the transitional relief is given is described at CG17820+.

ICTA88/S574, TCGA92/S161

»Ê¹ÚÌåÓýappre are additional rules covering indexation losses on disposals which affect Income Tax liabilities, under ICTA88/S574 or TCGA92/S161. Where there are claims

• under ICTA88/S574, to set a loss on a disposal of shares in a qualifying trading company against income, see CG17840+;
• under TCGA92/S161, to reduce the market value of an asset on appropriation to trading stock, see CG17880+.

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Eligibility

»Ê¹ÚÌåÓýapp transitional relief is available to

• an individual, or
• the trustees of a settlement made before 30 November 1993.

»Ê¹ÚÌåÓýappse people are referred to as `the taxpayerâ€�.

No transitional relief is available to trustees of a settlement made on or after 30 November 1993, or to companies. For these, the rules described at CG17700+ will apply in full in respect of disposals on or after 30 November 1993.

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Indexation losses

»Ê¹ÚÌåÓýapp transitional rules provide relief in respect of amounts of INDEXATION LOSS on disposals made by the taxpayer in the period 30 November 1993 to 5 April 1995.

To work out the indexation loss on any disposal, you compare the capital gains computation on the rules applying from 30 November 1993 onwards, see CG17700+, with the computation which would have resulted under the `old indexation rules�, see below. If, on a disposal,

• there is a loss, and under the old indexation rules there would have been a greater loss; or
• there is neither a gain nor a loss, but under the old indexation rules there would have been a loss;

the difference is the indexation loss for the transitional relief rules.

»Ê¹ÚÌåÓýapp `old indexation rulesâ€� are the rules which would apply if the changes to TCGA92/S53, TCGA92/S55 and TCGA92/S56, and the repeal of TCGA92/S103 and TCGA92/S111 by FA94 had not come into force.

In effect, for disposals of assets other than shares, the old indexation rules will be the rules described at CG17220+. For disposals of shares, you will however still need to take into account the changes to the pooling rules in TCGA92/S110, see CG51625.