Capital Gains Tax (CGT) is not payable by limited companies or unincorporated associations when they sell an asset and make a gain. Instead, the gain (proceeds less any allowable costs and reliefs) is subject to Corporation Tax at the applicable rate, currently 19%. There are various allowances and reliefs available that can reduce the amount of Corporation Tax payable.Until 31 December 2017, there was also an indexation allowance for corporate chargeable gains. The indexation allowance was used by companies to remove the effect of inflation when calculating any chargeable gains that they made.The monthly indexation allowance was frozen from 1 January 2018. This means that the indexation relief available for any gain after 1 January 2018 will be calculated based on the indexation allowance between the date the asset was acquired and the end of December 2017 regardless of the date the asset is disposed of. Any assets purchased after 1 January 2018 have no indexation allowance associated with them.This change effectively brought the corporate tax system into line with personal Capital Gains Tax and non-incorporated businesses for whom indexation allowance was abolished in 2008. There is no annual exemption for chargeable gains for companies as is the case for individuals. Planning noteA company can also reduce their total chargeable gains by deducting any capital losses. Any loss claimed will be reduced by any amount that was claimed for capital allowances.