There are several circumstances in which a disposal by a company is treated as giving rise to neither a gain nor a loss; these are set out in C2.603.
Where indexation allowance is available in respect of any expenditure which is allowable in the computation, the no gain/no loss outcome is achieved by treating the consideration for the disposal as the amount of the unindexed gain increased by the indexation allowance1.
Example 1
In February 2023, M Ltd sells an asset (A) used in its business for £45,000 and reinvests the proceeds in another qualifying asset (B); the company claims to roll over the gain under TCGA 1992, s 152. Asset A was acquired in June 2003 for £35,000. .
| £ | |
| Allowable expenditure | 35,000 | |
| Add: Indexation allowance (up to December 2017): 0.534 × £35,000 | 18,690 | |
| Deemed consideration for disposal of asset A and acquisition of asset B | £53,690 | |
| Note: Indexation allowance for companies is frozen from 1 January 2018 so for disposals on or after this date |
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