Law360: There is little to no empirical evidence to support the position adopted across most Organization for Economic Cooperation and Development (OECD) governments that tax relief for capital gains leads to stronger economic growth, broader entrepreneurship and higher savings, the organisation said in a report published on 26 February 2025.

ARCHIVED: This Practice Note has been archived and is not maintained. The annual tax on enveloped dwellings (ATED) was introduced in Finance Act 2013 (FA 2013) as part of a package of measures aimed at making it less attractive to hold high-value UK residential property indirectly, eg through a company, in order to avoid or minimise taxes such as stamp duty land tax (SDLT) on a subsequent disposal of the property. For more details on ATED, see Practice Note: ATED—the basics. As part of this package of measures, FA 2013 introduced an extension to the capital gains tax (CGT) regime by introducing a CGT charge on disposals on or after 6 April 2013 of property interests falling within the scope of ATED by both resident and non-resident non-natural persons (NNPs). This Practice Note summarises the CGT charge on ATED-related gains (referred to as the ATED CGT charge). With effect from 6 April 2019, the ATED CGT charge is abolished. From this date, most NNPs pay corporation tax on chargeable gains

CGT position on an individual’s death The rules dealing with CGT on death provide that: • assets that the deceased was competent to dispose of are deemed to be acquired by the personal representatives (PRs), or any other person on whom they devolve, at their market value at the date of death but are deemed not to have been disposed of by the deceased, meaning that: ◦ death is not a disposal for CGT purposes and no CGT arises as a result of the individual’s death, but ◦ the assets acquire a new base value for CGT purposes, ie any unrealised pre-death gains are effectively wiped out and assets that have risen in value since their original acquisition by the deceased are given a tax-free uplift for the calculation of future gains in the hands of the PRs or beneficiaries of the deceased’s estate. This also applies to the deceased's interest in joint property • allowable losses incurred by the deceased in the tax year of death may be set against gains accruing

This guide summarises capital gains tax (or CGT). CGT—a summary Broadly, CGT is payable on the disposal of an asset or a property where the disposal proceeds exceed the acquisition costs. That excess is the gain which is chargeable to CGT but there are a number of exemptions and reliefs which, depending on the circumstances, may apply to reduce or eliminate that chargeable gain. Disposal A disposal includes a gift as well as a sale. Where the disposal is a sale, the disposal proceeds are usually the sale proceeds, but there are special rules which substitute the market value of the asset or property if the disposal is made to a ‘connected’ person. Where the disposal is a gift, the market value of the asset or property is deemed to be the disposal proceeds. If there is a sale for less than the market value, so partly a sale and partly a gift, the market value may be substituted for the disposal proceeds, depending on the circumstances. Acquisition costs The acquisition costs will usually be the price which was paid

The difference between an asset's buying price and the price it is sold at. In bond markets, investors can generate returns by making capital gains as well as through regular coupon (interest) payments.

This Practice Note is about the rules for establishing whether companies are within the same group for the purposes of corporation tax on chargeable gains. In many ways a group of companies operates as a single economic unit. This means that from a tax policy perspective it makes sense to treat activities between group members differently from activities between unconnected persons. As a result, groups of companies are recognised in many areas of the tax system, including the rules for taxing a company's capital gains (also known as chargeable gains). Companies that are treated as a group for the purposes of corporation tax on chargeable gains are referred to in this Practice Note as a capital gains group. The main benefit for a company of being a member of a capital gains group is that assets can be transferred between group members free of corporation tax on chargeable gains (see Practice Note: Capital gains—intra-group asset transfers). A further advantage is that roll-over relief on the replacement of business assets is available where the relevant disposal

Companies which form a group for capital gains purposes are able to transfer assets to one another free of corporation tax on chargeable gains. Each company is a separate legal person for tax purposes meaning that, in the absence of a special rule, an intra-group transfer of a capital asset between companies would be a disposal and would trigger chargeable capital gains (or allowable losses). Acquisitions and disposals taking place between connected persons (a term which includes companies in the same tax group) are normally treated as taking place otherwise than at arm's length with the result that, without the grouping rules, the consideration for the transaction would be deemed to be equal to the market value of the asset transferred irrespective of any actual consideration paid (see Practice Note: Capital gains for connected persons). Special provisions are also included in various other areas of tax law (eg in particular, stamp taxes) to ensure that intra-group transfers of assets do not trigger any tax costs. This Practice Note is about the intra-group transfer rules applying

For a taxable capital gain to arise, there has to be a disposal, or a deemed disposal, of an asset. The taxpayer will need to establish when the disposal took place. This will determine when the tax must be paid, and in some cases will also decide: • the amount of tax • who has to pay it, and/or • whether it is payable at all This Practice Note describes the timing rules that apply to: • assets that are disposed of under a contract • deemed disposals, and • options and forfeited deposits In this Practice Note CGT means both capital gains tax and corporation tax on chargeable gains. Disposal under a contract The general rule is that when an asset is disposed of under an unconditional contract, disposal is treated as taking place at the time when the contract is made. This applies even if the asset is actually transferred at a later date. For example, when land is sold there is normally a contract, followed, at some later date,

Capital investment refers, in legal and commercial practice, to monies or assets committed to acquire, improve or create long‑term business assets, such as property, plant, equipment, or interests in companies or joint ventures. It is typically distinguished from working capital or day‑to‑day operational expenditure.The term is widely used in company law, corporate finance, real estate, energy and infrastructure projects, and private equity transactions, but is generally a descriptive expression rather than a term with a single, fixed statutory definition. Its precise meaning is usually determined by the relevant contract (for example, a shareholders’ agreement, investment agreement, facility agreement or project finance document) and by applicable accounting and tax rules.In England and Wales, Scotland, Northern Ireland and Ireland, usage is broadly consistent. In all four jurisdictions capital investment is central to issues such as: directors’ duties when approving major expenditure; corporate governance and disclosure; classification of expenditure for corporation tax and capital allowances; funding structures (equity vs debt); security and priority in insolvency; and regulatory approvals for infrastructure and real estate development.

A capital gain that would otherwise result in a charge to tax may be reduced or eliminated if the taxpayer has made capital losses and is able to set these against the gain. For set-off to be permitted, a loss must be an allowable loss. In this Practice Note, CGT is used to refer both to capital gains tax and to corporation tax on chargeable gains. Generally, if selling an asset for a gain would result in CGT, then selling that same asset for a loss will result in an allowable loss. Where an asset is exempt from CGT, and is disposed of for a loss, this will not normally be an allowable loss. There are, however, special rules entitling lenders to claim an allowable loss in respect of qualifying loans to traders which have become irrecoverable, where relevant conditions are met. An important condition is that there must be an outstanding amount of the principal of the loan at the time the claim is made, which will not be met if the lender has voluntarily

A collection of provisions within the CA 2006 (particularly CA 2006, Pts 17 and 18) designed to ensure that a company receives proper consideration for the shares it issues and does not return funds to shareholders except in defined circumstances.

The market for medium and long-term securities; includes the bank loan market.