Indexation

Raising an asset's purchase cost by inflation before working out the taxable gain.

Indexation multiplies the cost by the ratio of the government's Cost Inflation Index in the year of sale to the index in the year of purchase, so that only the gain above inflation is taxed.

For most assets it was removed for transfers from 23 Jul 2024, when the long-term rate became 12.5% without it. Land and buildings bought before that date keep a choice, described under grandfathering.