Under I-E taxation, in the I section you include realised chargeable gains on property and equity, with indexation on the gains at RPI. I just wondered how this worked when you have a mixture of gains and losses. For example, if one piece of property has made a chargeable loss of £10m, and one has made a chargeable gain of £20m, would you only index the overall net gain of £10m, or would you ignore the property with a loss and index the full £20m gain on the other property?
You only index gains. So taking your example: If property A was bought for 200m and sold for 190m, we have a loss of 10m. If property B was bought for 100m one year ago and indexation is at 5%, and was sold for 120m, then we have an indexed gain of 120 - 100 x 1.05 = 15. We could then offset the losses against the gains, so we would pay tax on 15 - 10 = 5. Best wishes Mark