Income and capital profits/losses

NotesQuizCBE

Income and capital profits/losses

Profits

  • 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

  • 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

NotesQuizCBE