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Capital Gains Tax Explained

Capital Gains Tax is a form of taxation that you may be liable to pay if you sell on certain assets for a profit. Examples of assets that would currently be liable for CGT include property and shares.

In terms of property, you may be liable to pay this tax if the house that you're selling has clearly been used for investment purposes (ie if it's a second home or a property that you've been renting out to gain an income.

Capital Gains Tax needs to be paid by both companies and individuals, although the rules differ. Some items are CGT exempt, including your own car, jewellery and other belongings up to a certain amount, plus winnings from gambling.

As ever, if you want to be kept up to date on the latest taxation rules then you should contact the Inland Revenue for a definitive answer on the current rules. The rules on tax liability do change at regular intervals, depending on decisions made by the Chancellor of the Exchequer.