Capital Gains Tax is a tax on the profit you make when you sell (an ‘asset’) that’s increased in value within your investment. It’s the gain you make that’s taxed, not the amount of money you receive. For example, if you bought an asset for £5,000 and sold it later for £25,000, you’ve made a gain of £20,000. It is not applicable to all assets and you don’t pay Capital Gains Tax if all your gains in a single year fall under your tax allowance.
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