Taxation of Chargeable Gains Act 1992 section 55

Assets owned on 31st March 1982 or acquired on a no gain/no loss disposal

Section 55 sets out the rules for computing the indexation allowance on the disposal of assets that were held on 31st March 1982, or that were acquired through a chain of no gain/no loss transfers from someone who held the asset on that date.

• For indexation purposes, assets held on 31st March 1982 are deemed to have been sold and reacquired at market value on that date, unless applying actual cost would give a higher indexation allowance and no section 35(5) election has been made.
• Where an asset passes through one or more no gain/no loss disposals after 31st March 1982, the eventual disposing person is treated as having held the asset on that date, and their acquisition cost is reduced by any indexation previously rolled into the base cost.
• Special rules preserve losses arising from "rolled-up indexation" — indexation allowance embedded in the base cost from no gain/no loss transfers made before 30th November 1993 — by adding the rolled-up amount to any loss, or creating a loss where the indexation allowance alone would have reduced the gain to nil.
• Where the asset has been merged, divided, changed in nature, or subject to part disposals, the rolled-up indexation is traced or apportioned in line with the treatment of the underlying acquisition and disposal costs.