Capital gains tax definition

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Capital gains tax (or CGT), is the tax levied by the government on the profits made from financial asset sales. CGT regulations and levels vary from country to country.

When you buy most financial assets like shares or commodities, you are doing so in the hope that you will later be able to sell them on at a profit. When that profit is incurred it is usually subject to capital gains tax.

Some financial products and markets do not incur capital gains tax. In the Singapore, for example, derivative trading products are exempt from CGT, but this will differ based on jurisdictions.

* Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.

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