For updates affecting this Division please see Part C0 Updates
Indexation allowance for companies
C2.301 Indexation allowance for companies—overview
Indexation allowance is intended to eliminate the effects of inflation from the calculation of chargeable gains. In effect the allowance increases the amount of allowable expenditure in line with inflation (based on the retail prices index), so that only any real-terms gain is taxed. The allowance applies for corporation tax purposes only.
The basic rule is that where, on the disposal of an asset, there is
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