CGT calculator

Unless you're selling before 6th April 2008, any on-line calculators which deal with indexation allowance and taper relief will be obsolete.

I understand you should simply deduct the full cost of the extension from the gain, i.e. you treat it as part of the acquisition cost of the house, even under the old regime, so it doesn't matter when it was done.

Not correct as he would then be indexing the cost for a greater period than it was actually incurred. The extension cost should be indexed separately for its own period and the total then used to calculate the gain and taper due.

Yes, you're right, and in this case it doesn't get indexed at all, six years ago being after the date at which taper replaced indexation.

My point really was that for all purposes other than indexation, and specifically for the purposes of PRR, LR, and taper, it doesn't matter when the improvements were done, as they are in effect treated as having been done when the property was acquired.

To work out the gain, you start with the disposal proceeds, and deduct: acquisition cost, acquisition expenses, disposal expenses, cost of improvements, indexation (based on acquiisition date) for cost and expenses of acquisition, indexation for cost of improvements (based on when they were paid for). The result then forms the basis for PRR/LR apportionment and then for taper.

This is just to thank Ronald Raygun and Alan Ferris for their helpful replies.

Stephen