Despite its name, CGT is not a separate tax. In fact, it is actually incorporated into your income tax. In a nutshell, the CGT regime aims to apply tax to gains realised when an asset is sold.
Whilst the rules are complex and special rules apply to particular transactions, the calculation of CGT looks something like the following:
This capital gain or loss is then included in your income tax return and taxed at your marginal rate.
Clearly, the tax payable in the year of disposal can often be quite significant. Before undertaking any venture that might require the payment of CGT, we strongly advise you call Saward Dawson, because opportunities for tax planning may be available.