Hi, please would anybody be able to check my calculations to see if I have got this correct. I have never done this before so need to make sure I have got it right.
Investment property company purchased a commercial property in October 1983 for £108,169. The property is now due to be sold for £450,000.
The retail price index was 86.36 in October 1983 and 278.1 in December 2017 (when indexation relief was frozen). The retail price index has therefore increased by 222% so the indexation relief due on the company's original purchase cost is £240,135.
So the chargable gain would be £101,696 (being sale proceeds £450,000 minus orginal cost £108,169 minus indexation relief £240,135). The chareable gain would then be liable for the current 19% corporation tax.