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Hi, I watched the lecture couple of times and could not figure out deducting the cost. We have
Proceeds
less incident cost.
then cost and enhanced cost.
this gives us unindexed Gain
less: indexation
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chargeable gainBut why do we deduct the cost 2 times(first original then indexed)?
Incidental costs are those related purely to obtaining the proceeds of sale.
Then you deduct any cost of purchase, and any extention costs
Then – if it’s a Ltd Co. you index those costs using the indexed factor to remove inflation.Thank you very much.
I was confused when the indexation was >1, hence this will give indexation cost more than the original so I assumed the rate was added on to 1. Now realised while typing this.Thanks again, love your teaching methodology.
Regards
G
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