Tax and your investments

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12. Indexation and taper relief - together!

Please note that the below is just for reference, as indexation and taper relief were abolished in April 2008.

Here's where it used to get moderately complicated.

Taper relief was not a substitute for indexation in the sense that you could forget about indexation altogether. The indexation allowance was still available, but it only applied to shares bought before 5 April 1998. Taper relief took over responsibility for reducing gains after 6th April 1998.

This means that if you have shares that were bought before 5 April 1998 and you sold them after 6th April 1998 you used to be able to reduce your gain by using indexation and taper relief together.

Example

Shares bought during May 1991 for £2,000 are sold during March 2003 for £4,000.

1. Keeping it legal 2. How HMRC treats your investment income 3. Keeping records 4. The basis of dividend income 5. Dividend income 6. Interest income 7. Interest on Treasury Stock 8. Capital gains tax basics 9. Base cost 10. Indexation 11. Taper relief 12. Indexation and taper relief - together! 13. Date of acquisition 14. Disposal proceeds 15. Disposal of a holding with a history 16. Takeovers 17. Bonus/scrip issues 18. Share splits 19. Buybacks 20. Rights issues 21. Share options 22. Beneficiaries and minors 23. Calculating your CGT liability 24. Using your annual CGT exemption 25. Transfers between spouses 26. ISAs 27. Delaying capital gains 28. Other tips to reduce CGT liability 29. Conclusion