What is Capital Gains Tax?

Capital Gains Tax, or CGT, is one of the least understood and most complex UK taxes. We look at how it works and potential changes on the horizon 

James Gard 12 November, 2020 | 1:41PM
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Slice of pie

Capital gains tax (CGT) is a wide-ranging, complicated and much misunderstood tax – it also brings in billions to the government's coffers every year. 

After a staggering amount of government spending to combat coronavirus and the introduction of stamp duty holiday on house purchases announced in July's summer statement, any changes to CGT are unlikely to be favourable to investors. Is the Government lining up a wealth tax raid to pay for all of this? The Office of Tax Simplication review into CGT, commissioned by the Chancellor, suggests that the tax could raise £14 billion a year under new proposals to double the rate to bring it in line with income tax. 

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James Gard  is content editor for Morningstar.co.uk

 

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