CG17847 - Indexation: disposals 30/11/93+: transitional relief: claims under S574
E has ICTA88/S574 disposals in 1993-94 giving rise to allowable losses of £15,000. On the old indexation rules, see CG17800, the allowable losses would have been £18,000. So E바카라 사이트™s 1993-94 indexation losses on these disposals are £3,000.
E has other disposals in 1993-94 giving rise to allowable losses of £14,000.
Indexation losses in respect of these disposals are £2,000.
E also has disposals in 1993-94 giving rise to gains of £23,000.
You first establish the amount of the reduction in 1993-94 chargeable gains which would (on its own) have been available in respect of indexation losses, as follows
| - | - | £ |
|---|---|---|
| - | Relevant gains | - |
| - | (gains £23,000 - losses £14,000) | 9,000 |
| Less | Exempt amount for the year | 5,800 |
| - | Excess of relevant gains over exempt amount | 3,200 |
The amount of the transitional relief would be the smallest of
- the overall limit on the transitional relief, £10,000; or
- the excess of relevant gains over the exempt amount for the year, £3,200; or
- the amount of the indexation losses relating to the disposals included in the computation, £2,000.
The amount of the indexation losses relating to the disposals included in the computation is the smallest of these amounts. So the maximum amount by which E바카라 사이트™s chargeable gains could be reduced in 1993-94 would be £2,000.
You next add to this £2,000 the amount of indexation loss relating to the ICTA88/S574 disposals. This is £3,000, so the total indexation losses which could be used in 1993-94 would be £5,000. As this is less than the overall limit of £10,000, all these amounts are available to E.
The result is that E has 1993-94 gains subject to CGT as follows:
| - | - | £ |
|---|---|---|
| - | Net chargeable gains | 9,000 |
| Less | Transitional relief | 2,000 |
| - | - | 7,000 |
| Less | Exempt amount | 5,800 |
| - | 1993-94 gains subject to CGT | 1,200 |
In addition, E can set off against income under ICTA88/S574 an amount of £15,000 plus indexation losses £3,000 = £18,000.
E has used £2,000 + £3,000 = £5,000 of indexation losses in 1993-94. If E has further indexation losses in 1994-95, these may be used up to a maximum of £5,000 (that is, the £10,000 overall limit LESS £5,000 used in 1993-94).