capital gains tax- indexation allowance

[pdfx4]

Could someone give me some advice please about the following ?
In 1987 I bought a one third share of a commercial building plus a small adjoining car park. I purchased with 2 other individuals who bought the other 2/3rds share . The building was not in very good condition and the total purchase price was about £24000 (i.e. £8000 for each of us) for the building and the car park. At that time the building had a value of about £22000 and the car park the rest.
In 2008 in order to "lock in" the indexation allowance (as it was about to be removed) the whole of the 1/3rd share in the whole of the property was gifted to my wife.
In March 2016 my wife gifted a 1/6th share of the whole of the property to myself leaving her with a 1/6th share
The building (but not the car park) was sold at the end of March 2016 . My wife and I received net proceeds of just under £15000 each.

The question is : - Am I under an obligation to fill in the Capital Gains Summary pages for my 2016/17 tax return ? I realise of course that the proceeds are under the £44000 figure but do I need to "claim" the above split of the original purchase price and also the indexation allowance available of approximately 60% ?
Otherwise , on the face of it, a small CGT liability could be due.
On the basis of the above allowance and split I am sure that no CGT will be due for either myself or my wife. However, I would just like to know whether I actually have to "claim" the split and the allowance or whether I can avoid having to fill in the CGT pages (maybe just include an extra note under "Additional Information" to be on the safe side ?).

Many thanks for any help

[bd6759]

The indexation allowance was withdrawn in 1998.

[pdfx4]

Thanks for the reply. However I believe that as the property was purchased before 1998 the indexation allowance was only lost in respect of a disposal after April 2008. As I gifted my share to my wife before April 2008 I think that had the effect of "locking in" the indexation (and therefore increasing) the original acquisition value ?

Perhaps however, and after further reflection, I have answered my own question namely that I need to fill in the CGT pages to "claim" (in the terms of HMRC notes) this allowance. Is this correct ?

Thanks.

[someone]

I can't answer most of your questions but I believe you do have to fill in the CGT pages.

https://www.gov.uk/government/publicati ... mary-sa108

See the Capital Gains Summary Notes:

Fill in the 'Capital gains summary' pages if:
you sold or disposed of chargeable assets which
were worth more than £44,400

Which presumably is your case.


If you don't do a tax return at all and you don't have any CGT to pay then it's possible you don't have to do a tax return in this year either but I wouldn't want to bet on that.

[someone]

Grrr. Didn't read your question properly - lots of extra zeros in my mind. So my response is completely irrelevant.

[maths]

You are quite correct in the fact that the now repealed indexation allowance for individuals could be locked in by an inter-spouse transfer pre 6 April 2008.

The effect was the the recipient spouse (your wife) acquired the asset at original cost to you plus the appropriate indexation allowance. I do not believe it is/was necessary to formally claim the IA (would need to check legislation).

On the subsequent 50% transfer of her 1/3 rd interest to you as an inter-spouse transfer means that your base cost is {8,000 + IA]/2.

If your individual consideration is less than (£44,400 annual exempt amount for tax year 15/16 11,100) AND the chargeable gain is £11,100 or less then no need to report.

[pdfx4]

Thanks very much for all the replies.
I suppose I am just trying to avoid all the extra work of filling in the CGT pages and making precise calculations - even though I feel certain that no CGT is due. However perhaps to be on the safe side it is better to formally report the sale. My hope of avoiding this (legitimately) was based on the question whether the Indexation allowance had to be "claimed" - as that is the word used in HMRC notes. However, in the absence of a clear answer, there is also the point about apportioning the original purchase price between the building and the car park.
Thanks very much anyway

[maths]

Have had a quick look at the legislation. Any indexation allowance is simply treated as part of the capital gain computation.

There is no need to lodge a claim for IA any more than a claim is necessary to deduct the base cost of an asset.

[pdfx4]

Thanks very much Maths.
Can you help me by telling me where that is in the legislation please ?
Many thanks.