Capital Gains refer to the profits created when you sell an asset. This can be subject to Capital Gains Tax in the UK.
Capital Gains are the profits earned upon the sale of an asset such as stocks, real-estate or Cryptocurrency. This is a result of the asset increasing in price since the owner purchase it. If the asset falls in price and is then sold, it is called a Capital Loss.
If you pay a Higher Rate or Additional Tax Rate of Income Tax, you will pay a higher rate of Capital Gains Tax. This means for the 2023/24 Tax Year, a 28% rate on gains from residential property is applicable, compared with the lower rate of 18%, and a 20% rate on other chargeable assets gains, compared with the lower rate of 10%.
A Capital Gains Tax Allowance exists, so profits are only taxed above that threshold.
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