The following Corporate guidance note provides comprehensive and up to date legal information covering:
When a person disposes of an asset and makes a profit that is capital in nature, this has the potential to be a taxable capital gain. It may be possible to avoid a tax charge by using an exemption or relief, or by reducing the gain using capital losses that have arisen on disposals of other assets.
Capital gains tax is payable by individuals, including personal representatives, trustees of settlements and individuals carrying on a trade or business in partnership. Companies do not usually pay capital gains tax. Instead, a company must include any capital (or chargeable) gains in its total profits within its corporation tax calculations. Corporation tax on chargeable gains is normally calculated following the same rules as capital gains tax.
For information on rates of capital gains tax and corporation tax, see Practice Note: Key UK tax rates, thresholds and allowances.
In this Practice Note the abbreviation CGT is used to refer both to capital gains tax and to corporation tax on chargeable gains.
This Practice Note is about CGT in a business context. For the CGT issues that are relevant in the context of private clients, see: Capital gains tax (Private Client)—overview.
The generally accepted approach for calculating a capital gain or loss is to:
take the consideration received on the disposal of an asset—if the
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