As of January 1, 2018, who is no longer able to benefit from indexation allowance?

The indexation allowance is a method that was used to adjust the purchase price of assets for inflation when calculating capital gains tax. It was previously available to companies, allowing them to increase the cost basis of their assets in line with inflation before calculating capital gains.

As of January 1, 2018, the rules governing the indexation allowance were updated, and companies could no longer benefit from it in relation to gains made after this date. This means that when companies sell assets, they must calculate their capital gains without being able to adjust their purchase price to account for inflation, potentially leading to higher reported gains and, consequently, higher taxes.

In contrast, individuals, sole traders, and partnerships retained their ability to utilize some form of indexation in their capital gains calculations, particularly for assets held prior to April 2018. Therefore, while individuals, sole traders, and partnerships have different rules and regimes potentially applicable to them, companies were specifically restricted from using the indexation allowance from the specified date onward.