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Capital gain |
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Capital gainThe gain in value that the owner of an asset experiences when the price of the asset rises, including when the the currency in which the asset is denominated appreciates. Contrasts with capital loss.Capital gainWhen a stock is sold for a profit, the capital gain is the difference between the net sales price of the securities and their net cost, or original basis. If a stock is sold below cost, the difference is a capital loss.Capital gainThe amount chargeable to capital gains tax (CGT) from gains made on the disposal of an asset. In the case of stocks and shares, your gain is the difference between the proceeds of selling the shares and the amount you paid for them adjusted for indexationIn calculating the acquisition cost, you can include including broker commissions and stamp duty. Depending on when you bought the shares, the base cost can be increased through the indexation allowance - a good thing from a tax point of view because the higher your acquisition cost, the lower your chargeable gain.In calculating the disposal proceeds, you can deduct commissions and other charges incurred in the process of selling.Whether you have to pay Capital Gains Tax on the chargeable gain will depend on whether you have already used up your annual exemption (the amount of gains you can make in any one year without paying CGT), and on the level of your other gains or losses in the tax year.Taper relief, which reduces the rate of tax you pay on gains, may also be available, depending on how long you have held the shares at the time you sell them.Similar MatchesCapital growthCapital growthIn general terms, the increase in value of an asset.As far as shares are concerned, capital growth is an increase in share price compared to what you paid, and is one of the elements of what investors called 'total return', the other component being income through dividends.Research has shown that investing in shares over the last 50 years produced a better total return than investments in bonds or deposits, and capital growth has been a major part of that superior performance. There is certainly no guarantee that shares will continue to outperform other investments, but most observers believe that they will over the long term. Capitalized interestCapitalized interestInterest that is not immediately expensed, but rather is considered as an asset and is then amortized through the income statement over time. Capital flightCapital flightThe transfer of capital abroad in response to fears of political risk. Capital gains taxCapital gains taxThe tax levied on profits from the sale of capital assets. A long-term capital gain, which is achieved once an asset is held for at least 12 months, is taxed at a maximum rate of 20% (taxpayers in 28% tax bracket) and 10% (taxpayers in 15% tax bracket). Assets held for less than 12 months are taxed at regular income tax levels, and, since January 1, 2000, assets held for at least five years are taxed at 18% and 8%. Capital-usingCapital-usingA technological change or technological difference that is biased in favor of using more capital, compared to some definition of neutrality. Further SuggestionsSmall capitalization (small cap) stocksCapital rationing Capital intensive "Soft" capital rationing Free capital markets capital transfer tax Capital gains distribution Balance on capital account Capital market Capital International Indexes Human capital Capital mobility Capital intensity capital Total capitalization Capital appreciation fund Capital growth Capital outflow Capital control Capital account Real capital loan capital Morgan Stanley Capital International World Index Capitalization table Capitalism |
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