CAT / FIA FTX Syllabus C. Income Tax Liabilities - Income and capital profits/losses - Notes ^{4 / 5}

Income tax

- Income profits usually involve recurring receipts

- Income tax is charged on receipts which might be expected to recur (such as weekly wages or profits from running a business)

Capital gains tax (CGT)

- Capital profits are usually one-off gains

- CGT is charged on one-off gains (for example from selling a painting owned for 30 years).

Losses made in relation to income sources (such as a business or letting out a property) can usually only be set against income profits

Capital losses can only be set against capital gains