In every corporation tax question, tax students will have to deal with capital gains. The most common assets examined are buildings.
It is very simple to compute a gain (sale proceeds less cost less indexation allowance).
You can deduct selling costs like legal expenses and capital improvements like an extension.
Indexation allowance is compensation for inflation and computed based on the movement in the retail price index. Indexation is only available until December 2017 and reduces the gain but can never create a capital loss.
The capital gain can also be reduced by any capital losses. Remember that companies do not get an annual exemption and the full gain is subject to corporation tax.
If you end up with a capital loss, this can only be deducted from capital gains. Unused capital losses are not carried back but can be carried forward.
Finally, if the sale proceeds are reinvested in a building used in the trade, then the gain can be postponed under rollover relief.
Wishing you the best of luck in your exams. 
#tax #students #building #capitalgains #neildacosta #condensednotes