Sally is currently trying to understand how chargeable gains are calculated and taxed and is particularly confused regarding Indexation Allowance and how to calculate the gains on shares for both individuals and companies.

Required: Explain the chargeable gain rules regarding share disposals and Indexation Allowance to Sally. Your answer should explain the nature and purpose of Indexation Allowance and whether it applies to both individuals and companies. Your answer should also explain how the gains on shares are calculated and any similarities and differences to the identification and calculation of the costs of shares.

word count 300 words