CG17826 | Indexation: disposals 30/11/93+: use of transitional relief: example
From HM Revenue & Customs · Capital Gains Manual
D has disposals in 1993-94 giving rise to allowable losses of £9,000. Disposals on or after 30 November 1993 are computed in accordance with CG17700+. On the old indexation rules, see CG17800, there would have been allowable losses of £15,000. So D’s 1993-94 indexation losses, see CG17800, are £6,000.
D also has disposals in 1993-94 giving rise to gains of £20,000.
The transitional relief available to D for 1993-94 is computed as follows
| - | - | £ |
|---|---|---|
| - | Relevant gains 1993-94 (gains £20,000 - losses £9,000) | 11,000 |
| LESS | Exempt amount for the year | 5,800 |
| - | Excess of relevant gains over exempt amount | 5,200 |
The amount of the transitional relief is 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, £5,200; or
the amount of indexation losses for 1993-94, £6,000.
The excess of relevant gains over the exempt amount for the year is the smallest of these amounts, so D’s chargeable gains for 1993-94 are reduced by this amount. The result is
| - | - | £ |
|---|---|---|
| - | Net chargeable gains | 11,000 |
| Less | Transitional relief | 5,200 |
| - | - | 5,800 |
| Less | Exempt amount | 5,800 |
| - | 1993-94 | NIL |
D has unused indexation losses available of £800 (£6,000 less used 1993-94 £5,200). These are available for carry forward to 1994-95. See CG17830+.