Financecalendar_todayLast updated: Apr 2026
What is Capital Gains?
/ˈkæpɪtəl ɡeɪnz/
A capital gain is the profit you make when you sell an asset for more than you paid for it. Governments typically tax capital gains, often at a different rate than income tax.
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Everyday Example
If you buy shares for £1,000 and sell them for £1,500, your capital gain is £500. In the UK, gains above £6,000/year are subject to Capital Gains Tax.
publicReal-World Application
“Amazon founder Jeff Bezos avoided significant income tax for years by taking a minimal salary but accumulating enormous wealth through unrealised capital gains in Amazon stock.”
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Did you know?
Capital gains taxes became widespread after World War I as governments sought new revenue streams to pay war debts.
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Key Insight
Unrealised gains (paper profits you haven't sold) are not taxed — only realised gains trigger tax. This asymmetry shapes how wealthy investors structure their portfolios.
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