Schedule D (tax on trading income, income from professions and vocations, interest, overseas income and casual income)
[COLOR="Purple"]Capital gains tax[/COLOR]
[COLOR="Purple"]Capital gains are subject to tax at the 18% (for individuals)[/COLOR] [COLOR="RoyalBlue"]or at the applicable marginal rate of corporation tax (for companies).[/COLOR]
The basic principle is the same for individuals [COLOR="Sienna"]and companies[/COLOR] - [COLOR="RoyalBlue"]the tax applies only on the disposal of a capital asset, and the amount of the gain is calculated as the difference between the disposal proceeds and the "base cost"[/COLOR], being the original purchase price plus allowable related expenditure. However, from 6 April 2008, the rate and reliefs applicable to the chargeable gain differ between individuals and companies. Companies apply "indexation relief" to the base cost, increasing it in accordance with the Retail Prices Index so that (broadly speaking) the gain is calculated on a post-inflation basis (with different rules apply for gains accrued prior to March 1982). [COLOR="DarkSlateGray"]The gain is then subject to tax at the applicable marginal rate of corporation tax. [/COLOR]Individuals are taxed at a flat rate of 18%, with no indexation relief (but subject to a limited relief for the first £1m of gains for "entrepreneurs") [4].
A capital gain is a profit that results from investments into a capital asset, such as stocks, bonds or real estate, which exceeds the purchase price. It is the difference between a higher selling price and a lower purchase price, resulting in a financial gain for the investor.[1] Conversely, a capital loss arises if the proceeds from the sale of a capital asset are less than the purchase price.
[COLOR="RoyalBlue"]Capital gains may refer to "investment income"[/COLOR] that arises in relation to real assets, such as property; financial assets, such as [COLOR="RoyalBlue"]shares/stocks or bonds[/COLOR]; and intangible assets such as goodwill.
Many countries impose a tax on capital gains of individuals or corporations, although relief may be available to exempt capital gains: in relation to holdings in certain assets such as significant common stock holdings, to provide incentives for entrepreneurship, or to compensate for the effects of inflation.
[COLOR="Blue"]http://en.wikipedia.org/wiki/Taxation_in_the_United_Kingdom[/COLOR]
