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Taxation of Chargeable Gains Act 1992, Section 54 is up to date with all changes known to be in force on or before 17 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
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(1)Subject to any provision to the contrary, the indexation allowance is the aggregate of the indexed rise in each item of relevant allowable expenditure; and, in relation to any such item of expenditure, the indexed rise is a sum produced by multiplying the amount of that item by a figure expressed as a decimal and determined, subject to subsections (2) and (3) below, by the formula—
where—
RD is the retail prices index for [F1December 2017]; and
RI is the retail prices index for March 1982 or the month in which the expenditure was incurred, whichever is the later.
F2(1A). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
[F3(1B)The references in subsection (1) to an item of allowable expenditure do not include any item of expenditure incurred on or after 1 January 2018.]
(2)If, in relation to any item of expenditure—
(a)the expenditure is attributable to the acquisition of relevant securities, within the meaning of section 108, which are disposed of within the period of 10 days beginning on the day on which the expenditure was incurred, or
(b)RD, as defined in subsection (1) above, is equal to or less than RI, as so defined,
the indexed rise in that item is nil.
(3)If, in relation to any item of expenditure, the figure determined in accordance with the formula in subsection (1) above would, apart from this subsection, be a figure having more than 3 decimal places, it shall be rounded to the nearest third decimal place.
(4)For the purposes of this section—
(a)relevant allowable expenditure falling within paragraph (a) of subsection (1) of section 38 shall be assumed to have been incurred at the time when the asset in question was acquired or provided; and
(b)relevant allowable expenditure falling within paragraph (b) of that subsection shall be assumed to have been incurred at the time when that expenditure became due and payable.
Textual Amendments
F1Words in s. 54(1) substituted (with effect in accordance with s. 26(6)(7) of the amending Act) by Finance Act 2018 (c. 3), s. 26(3)(a)
F2S. 54(1A) omitted (with effect in accordance with Sch. 2 para. 83 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 2 para. 80(3)
F3S. 54(1B) inserted (with effect in accordance with s. 26(6)(7) of the amending Act) by Finance Act 2018 (c. 3), s. 26(3)(b)
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