INDEXATION & TAPER RELIEF

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Dont know the difference<BR><BR>Also when should i do these?<BR><BR>Dont really understand too well.

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  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    When should i actually do taper relief etc because i'm finding this hard.<BR><BR>
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    Indexation finished, for individuals on 5 April 1998. Taper relief started at that date. There are special rules for assets purchased between 17 March 98 and 5 April 98.<BR><BR>Only individuals get taper relief on capital gains, companies still get indexation.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    Indexation is used to adjust the figures for inflation. This is used up to 5 April 1998. After this date Taper relief took over.<BR><BR>Taper relief reduces the amount of the net chargeable gain the longer the asset is held. Taper relief is calculated on the number of complete years the asset is held.<BR><BR>See<BR><BR>http://www.accaglobal.com/publications/inpractice/46/22680<BR><BR>Helen<BR&gt;
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    remember...indexation or taper relief cannot reduce a profit into a loss....
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    Unless the asset was transferred under the 'no gain/no loss provisions prior to 30 Nov 1993.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    So we can have both indexation and taper relief at the same time. <BR><BR>Please correct me if i'm wrong. The indexation i would have to work out if for until Apr 1998. After that we calculate the whole years after 5th apr 1998 then times the gains by a percentage to show taper relief.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    INDEXATION & TAPER RELIEF

    Yes, bearing in mind that so long as the asset was purchased prior to 17.3.98 there is a bonus year's taper relief.

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