capital gains tax
- noun a tax on the difference between the gross acquisition cost and the net proceeds when an asset is sold. In the United Kingdom, this tax also applies when assets are given or exchanged, although each individual has an annual capital gains tax allowance that exempts gains within that tax year below a stated level. In addition, certain assets may be exempt, e.g., a person’s principal private residence and transfers of assets between spouses.
- noun the tax payable where an asset has increased in value during the period of ownership.