Chapter 19 – Example 4

In previous examples of calculating the indexation allowance, it was taken as the indexed cost less the original cost e.g example 3 has indexation allowance of £9,955 – £5,000, however, in the answer to example 4 you have deducted the original cost and the indexed cost from the proceeds to arrive at a chargeable gain of £9,107, should this not be:
Proceeds £15,000
Less allowable cost (£2,500)
Unindexed gain £12,500
Indexation allowance (£3,393 – £2500) (£893)
Chargeable gain £11,607