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Indexation allowance

Trying to calculate the indexation allowance on a capital gain and am confused by the outcome.
the RPI at point of sale was .05 and at point of purchase was .083. THerefore the calulation should be (.05-.083)/.083. This produces a negative is the ignored or do you add the outcome rather than deduct it ie the gain was 900. therefore is the taxable liability 1258 or 544?

Any suggestions will be greatly appreciated.


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18th Jan 2007 12:44

Thanks everyone for your help - and yes i was using the wrong figures!

Sometimes you can't see the wood for the trees

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By Taxi
17th Jan 2007 17:06

I was going to say the same, but it depends on where
the data comes from. If you are using Whillan's then you can easily get in a pickle as it gives you the PRI formula and then displays a table of factors so you have a natural tendancy to use the wrong figures!

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By Taxi
17th Jan 2007 13:52

You have the opposite of an allowance as your figures are decrea
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It is what I use, just multiply cost by the relevant factor.

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17th Jan 2007 15:31

Are you sure you are using the right figures? The RPI has never been .05 or .083 – after rebasing it has gone from 79.44 in March 1982 to 202.7 in December 2006.

What are the dates of your acquisition and disposal? We may be able to help with the numbers.

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17th Jan 2007 16:07

Indexation factors
I think you are using the pre-calculated indexation factors rather than the RPI!

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