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Legal Terms - Capital gains tax (CGT)
An imposition on taxable profits resulting from taxable sales of taxable assets. Occurrences seen as disposals
The term "disposal" encompasses more than just the gifting, selling, or exchanging of an item. It also includes situations such as the entire loss or destruction of the asset (as defined in the Taxation of Chargeable Gains Act 1992 s 24(1)), the transfer of trust property (s 71), or the receipt of a capital sum related to an asset (s 22).
The Capital Gains Tax (CGT) was implemented in 1965 and is applicable exclusively to profits acquired after 5 April 1965. CGT is applicable to gains that have been made from 31 March 1982 for disposals that occurred on or after 6 April 1988. Prior to April 2018, a relief known as indexation allowance was used to exclude profits achieved by a corporation that were solely due to inflation when calculating tax increases. However, this relief has been frozen and is no longer applicable. Individuals have not received any form of compensation for the impact of inflation since 1998. An individual's gains may be eligible for Business Asset Disposal Relief.
An imposition on taxable profits resulting from taxable sales of taxable assets. Occurrences seen as disposals
The term "disposal" encompasses more than just the gifting, selling, or exchanging of an item. It also includes situations such as the entire loss or destruction of the asset (as defined in the Taxation of Chargeable Gains Act 1992 s 24(1)), the transfer of trust property (s 71), or the receipt of a capital sum related to an asset (s 22).
The Capital Gains Tax (CGT) was implemented in 1965 and is applicable exclusively to profits acquired after 5 April 1965. CGT is applicable to gains that have been made from 31 March 1982 for disposals that occurred on or after 6 April 1988. Prior to April 2018, a relief known as indexation allowance was used to exclude profits achieved by a corporation that were solely due to inflation when calculating tax increases. However, this relief has been frozen and is no longer applicable. Individuals have not received any form of compensation for the impact of inflation since 1998. An individual's gains may be eligible for Business Asset Disposal Relief.
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