Capital Gains Tax is form of tax that is charged from the profit that one makes when they sell something i(an asset) that's increased in value. The part that is taxed is the profit only and not the amount of money that you receive. An example of this would be; You purchase a car for £5,000 and then you sell it for £20,000. £25,000 is taxable.However, some assets can be tax-free dependent on what they are.In relation to capital gains tax is when you are disposing of something and this could be: Selling an item, giving it away as a gift or transferring it to someone else, swapping it for something else, or even getting compensation for it.

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