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TCGA92/S161 (3)

Under ICTA88/S161 (1), where a person appropriates an asset as trading stock for the purposes of a trade, there is a deemed disposal for capital gains purposes at market value at the date of appropriation, see CG67900P. But, under TCGA92/S161, if the income from the trade is taxable under Schedule D Case I, the person may elect to have the market value of the asset reduced by the deemed gain, or increased by the deemed loss, see CG67900P. »Ê¹ÚÌåÓýapp changes to indexation allowance introduced by Finance Act 1994 would remove indexation from any losses arising on the appropriation, see CG17700+.

S161(3) claims

»Ê¹ÚÌåÓýapp transitional relief for indexation losses can apply to these losses also. You should compute the indexation loss as before, see CG17800. »Ê¹ÚÌåÓýapp relief is given in exactly the same way as described for the calculation of increases to allowable losses arising on ICTA88/S574 disposals, see CG17840+.

Both S161(3) and S574 claims

If claims are made under both TCGA92/S161 (3) and ICTA88/S574, you apply the rules at CG17840+ by aggregating the amounts of the indexation losses attributable to the relevant appropriations under TCGA92/S161, and the ICTA88/S574 disposals.

Where the £10,000 limit on transitional relief is exceeded, see CG17850 and CG17855+, the allocation of indexation losses may be made between any of the categories, up to the amount of indexation losses on each.