indexation allowance

Related Overviews


'indexation allowance' can also refer to...


More Like This

Show all results sharing this subject:

  • Law


Show Summary Details

Quick Reference

When a capital gain is made on the disposal of an asset by a company, the amount of the gain (and therefore the company's liability to tax) is adjusted for inflation by adding indexation allowance to the base cost of the asset. Indexation allowance is calculated by comparing the retail prices index for the month of disposal with the retail prices index for the month of acquisition.

Indexation allowance is not applied when computing the gain made by an individual. Instead, an individual pays capital gains tax at a rate of 18%.

Subjects: Law.

Reference entries

Users without a subscription are not able to see the full content. Please, subscribe or login to access all content.