C2.304 No gain/no loss disposals
Indexation allowance is not available to individuals, trustees and personal representatives for disposals on or after 6 April 2008. It continues to be available to companies but is frozen from 1 January 2018 so for disposals on or after this date the allowance is calculated up to December 2017.
There are several circumstances in which a disposal is treated as giving rise to neither a gain nor a loss; these are set out in C2.603.
In such circumstances, this is achieved by treating the consideration for the disposal as the amount of the unindexed gain increased by the any indexation allowance which may be due on the disposal1.
Where there is an acquisition of the asset as a result of the disposal, the expenditure on the acquisition is the amount deemed to be received by the transferor, and the transferee's indexation allowance (if available) is based on that amount. The rule that the transferor's acquisition of the asset is to be taken as the transferee's acquisition is disregarded2.
In February 2021, M Ltd sells an asset (A) used in their business for £45,000 and reinvests the proceeds in