Capital gains

Capital gains

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 pay capital gains tax, but instead must include any capital (or chargeable) gains in their total profits within their corporation tax calculations. Corporation tax on chargeable gains is normally calculated following the same rules as capital gains tax.

For information about the CGT treatment of UK general partnerships, limited liability partnerships (LLPs) and limited partnerships, see Practice Note: Partnerships and capital gains.

For information on rates of capital gains tax and corporation tax, see Practice Note: Key UK tax rates, thresholds and allowances.

In this Overview the abbreviation CGT is used to refer both to capital gains tax and to corporation

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